Europe Factors to Watch-Shares to drop after Chinese data

jueves 20 de febrero de 2014 03:25 GYT

PARIS, Feb 20 (Reuters) - European stocks were set to fall in early trade on
Thursday as data showing a drop in China's factory activity revived worries
about the pace of global growth.
    Investors were also rattled by minutes of the U.S. Federal Reserve's latest
policy-setting meeting, which indicated that the central bank will keep trimming
its bond-buying stimulus unless there is a significant economic surprise. The
minutes triggered a late sell-off on Wall Street on Wednesday. 
    China's flash Markit/HSBC Purchasing Managers' Index (PMI) fell to a
seven-month low of 48.3 in February from January's final reading of 49.5,
sparking a sell-off in Asian shares. A reading below 50 indicates a contraction
while one above shows expansion. 
    Investors awaited manufacturing data for Germany, France and the euro zone
as a whole. The forecast for Germany's flash manufacturing PMI, due at 0828 GMT
is for 56.3; for France, due at 0758 GMT, is 49.6; and for the euro zone, due at
0858 GMT, is 54.
    Traders were also combing through a flurry of company results, seeking clues
on the damage caused by sharp currency swings in emerging markets.
    "It's hard to really price in the currency crises in emerging markets as we
don't know where it will stop. So, protectively, a lot of people prefer cutting
positions on stocks with strong exposure to emerging countries," a Paris-based
equity and exchange-traded fund (ETF) sales trader.
    Electrical gear maker Schneider Electric warned it expected low
single-digit organic sales growth this year and that unfavourable exchange rates
would continue to weigh on its operating margin.
    Similar picture from consumer goods group Henkel, which said
weak foreign currencies would continue to hurt its results in the first half of
2014 as it reported fourth-quarter sales below expectations.
    European blue-chips are more exposed to emerging market weakness than
American and Japanese peers. According to data from MSCI, companies listed on
the MSCI Europe index have about 24 percent exposure to emerging
markets, versus 15 percent for MSCI USA and 14 percent for MSCI
    Overall, half way into European earnings season, results have been
relatively good, with 59 percent of companies reporting in line or
better-than-expected profits, according to Thomson Reuters Starmine. In absolute
terms, profits are up 1.3 percent year-over-year and revenues are up 1.9
percent.Europe bourses in 2014:Asset performance in 2014:------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0729 GMT:         
                                        LAST         PCT CHG    NET CHG
 S&P 500                                1,828.75     -0.65 %    -12.01
 NIKKEI                                 14,449.18    -2.15 %    -317.35
 MSCI ASIA EX-JP                        456.11       -0.90      -4.15
 EUR/USD                                1.3749       0.12 %     0.0017
 USD/JPY                                101.93       -0.37 %    -0.3800
 10-YR US TSY YLD                       2.718        --         -0.02
 10-YR BUND YLD                         1.663        --         0.00
 SPOT GOLD                              $1,313.44    0.17 %     $2.19
 US CRUDE                               $103.12      -0.18 %    -0.19

  > GLOBAL MARKETS-Stocks slip, yen up on China factory report 
  > Wall St falls after Fed minutes; Facebook drops late 
  > Tokyo's Nikkei share average closes down 2.15 pct 
  > Dollar dips, Aussie slides as China factory survey disappoints 
  > Gold weakens as dollar recovers after Fed minutes 
  > London copper slips as China factory growth contracts 
  > Brent slips below $110 on worries over China growth 
    France and Germany agreed that a planned pan-European tax on financial
transactions should cover all derivatives products, a source close to French
Finance Minister Pierre Moscovici said on Wednesday. 
    German consumer goods group said weak foreign currencies would continue to
hurt its results in the first half of 2014 as it reported fourth-quarter sales
below expectations. 
    Schneider said it expected low single-digit organic sales growth this year
and that unfavourable exchange rates would continue to weigh on its operating
    The Dutch staffing firm reported lower-than-expected fourth-quarter results
on Thursday because of currency effects and marketing costs, and said it expects
a continued gradual improvement into the first quarter. 
    BAE posted a 3 percent rise in full-year profit on Thursday, in line in
analysts' expectations, and said it expected continuing U.S. budget pressures to
reduce earnings per share by 5-10 percent this year compared to 2013. 
    Europe's largest hotelier said it achieved a 5.3 percent like-for-like rise
in full-year operating profit, driven by robust demand in Europe and in emerging
    The aerospace, security and defence group predicted "significant" growth in
profitability this year after posting higher earnings on the back of stronger
than targeted demand for civil jet engine overhauls in 2013. 
    Barry Callebaut has acquired the remaining 51 percent of Biolands Group, a
certified cocoa bean supplier in Africa, the latest effort to secure long-term
bean supplies to meet rising demand. 
    The French oil services group reported an 8 percent increase in
fourth-quarter revenue to 2.484 billion euros and raised its 2013 dividend by 10
percent while confirming previously lowered targets. 
    The airline swung more sharply into profit than expected last year and said
it was on course to meet its main debt reduction goal in 2015 after a prolonged
    Europe's largest defence electronics firm signalled a continued offensive in
emerging markets on Wednesday after Gulf defence contracts helped boost its
order intake in 2013, while in western Europe military cuts continued to bite. 
    Europe's biggest supplier of construction materials said cost savings,
innovation and a recovery in the United States would help operating profit to
rebound this year after adverse currency effects and a weak economy in Europe
hit 2013 sales and profits. 
    The French investment bank has promised to return more cash to shareholders
after posting a 10 percent rise in underlying fourth-quarter net profits due to
    The French maker of electronic payment terminals reported 2013 group net
income grew 18 percent to 114 million euros said it saw 2014 organic revenue
growth of at least 10 percent. 
    Italian investment bank Mediobanca is working on a project to pool the bad
loans some of the smaller Italian lenders built up during the recession, CEO
Alberto Nagel said on Wednesday, adding the bank would decide whether the
project is feasible in the next two months. 
    The French network operator received approval from the national telecoms
regulator for a pilot test of "LTE Advanced", an advanced version of the
fourth-generation mobile technology. 
The board of Generali has mandated Chief Executive Mario Greco to pursue legal
action and seek damages from two former top executives in relation to past
loss-making investments, the Italian insurer said on Wednesday. 
    The industrial chemicals company said it signed a share buyback agreeement
covering 0.4 percent of its share capital. 
    The French office-property investor reported a 141-percent increase in
annual net profit for 2013 and said it would propose a dividend of 3.67 euros
per share. 
    The French airports group reported a 10-percent drop in 2013 net income
group share to 305 million euros.