Periphery lags as European shares post small gains ahead of Fed

miércoles 29 de octubre de 2014 13:42 GYT
 

* FTSEurofirst 300 up 0.2 pct
    * BBVA leads euro zone bank selloff after result miss
    * Traders say investors more cautious after AQR
    * Fugro tumbles 26 pct after cancelling payout

    By Francesco Canepa
    LONDON, Oct 29 (Reuters) - Southern European shares lagged
small gains in pan-European indexes on Wednesday as weak results
from heavyweight bank BBVA offset optimism ahead of a
Federal Reserve's policy announcement. 
    Spanish bank BBVA fell 4.1 percent as it reported
a lower-than-expected net profit for the first nine months of
the year and the pace of an ongoing turnaround at the lender
disappointed analysts and investors. 
    The stock was the biggest drag on Euro STOXX banking index
, which fell 3.1 percent and took its fall since the
publication of the European Central Bank's stress tests over the
weekend to 4 percent.
    Investors had generally been expecting the health checks'
publication to restore confidence in some of the weaker lenders
and trigger a rally. 
    But traders said these bullish bets had been unraveling as
the tests highlighted capital holes at some Italian banks, as
well as extra non-performing loans and hidden
losses. 
    "There were lots of positions held in 'weak' financials, as
the ECB's AQR test results were seen as a trigger for the next
uptick," a trader said. "They were all stopped out." 
    Shares in Banca Monte dei Paschi di Siena, which
faces a 2.1 billion euro capital shortfall after the stress
test, fell 8.2 percent after trading in the stock was repeatedly
halted. A Thomson Reuters index of Italian banks fell 4.4
percent. 
     Fiat Chrysler Automobiles (FCA) outperformed a
lacklustre Milan bourse, surging 12.8 percent as it unveiled
plans to list a 10 percent stake in luxury brand Ferrari and
issue $2.5 billion in convertible bonds to help fund the parent
company's turnaround plan. 
    The broader FTSEurofirst 300 index of top European
shares closed up 0.2 percent at 1,319.34 points, rising for the
fourth of the last seven sessions, albeit in declining volume.
    Trading volume on the index was nearly 10 percent lower than
its average for the past month.
    Global shares have rebounded during that time after a sharp
pullback, as investors took heart from generally strong
corporate earnings, especially in the United States, and the
prospect of an accommodative stance from Federal Reserve.
    The market expects the Fed's Federal Open Market Committee
to announce it will end years of stimulus measures this month
but also send a soothing message by signaling interest rates are
not likely to rise soon.
    "The volumes into the rally are waning," Monument Securities
head of sales, Andy Ash, said. "As we approach the FOMC meeting
and the month end, we have catalysts to pivot once again." 
    
    RESULTS MIXED   
    Dutch marine services group Fugro sank 26.6
percent after it warned it would not pay a dividend for 2014 due
to deteriorating markets and price pressure on oil and gas
projects.
    The dividend cut, which came hard on the heels of a profit
warning from Italian oil industry services group Saipem
 on Tuesday, sent shares in sector peer CGG 
down 3.4 percent. 
    Providing some support to the battered energy sector,
investors welcomed oil major Total's decision to
maintain its dividend while pressing ahead with cost cuts after
falling oil prices squeezed its third-quarter profits. The
shares rose 2 percent.
    Europe's largest semiconductor company STMicroelectronics
 shed 10 percent after posting higher-than-expected
quarterly net profit but saying margins would be flat and
revenue would fall in the final quarter due to a softening
market.  
    About a third of companies listed on the STOXX Europe 600
 benchmark index have reported results so far in the
earnings season, with 67 percent of them meeting or beating
profit forecasts, and 59 percent meeting or beating revenue
forecasts, according to Thomson Reuters Starmine data.    
    Europe bourses in 2014: link.reuters.com/pap87v
    Asset performance in 2014: link.reuters.com/gap87v
    Today's European research round-up 

 (Additional reporting by Blaise Robinson in Paris and Vikram
Subheadar in London; Editing by Tom Heneghan)