European Factors to Watch-Shares seen lower on China credit worries

miércoles 12 de marzo de 2014 03:41 GYT

LONDON, March 12 (Reuters) - European shares headed for a weaker open on Wednesday, tracking losses on Wall Street and in Asia, with poor earnings outlook from some companies and worries about the Chinese credit market hurting sentiment.

Enel, Italy's biggest utility, said its core earnings this year would be lower than last year, while Germany's No. 1 utility E.ON cut its dividend and said it expected core profit to decline in 2014 for the third year in a row.

Investors' focus will also be on mining stocks after Shanghai copper fell by its five percent daily limit and London copper hit a 44-month low on growing concerns that credit-linked defaults in China, the world's top user of the metal, could unlock copper from financing deals and unleash more selling.

Chinese firm Baoding Tianwei Baobian Electric announced a second straight year of net losses on Tuesday, leading to a suspension of its stock and bonds on the Shanghai Stock Exchange and stoking fears that it too may default on bond payments after Chaori Solar last week. Much of copper imports are used in China as collateral to raise funds.

"Outlook today is not a positive one," Credit Agricole said in a note. "Copper prices continue to be hit by China growth worries ... Ukraine tensions have intensified, with diplomatic efforts yielding no success and Russia stating that it would recognise the results of the referendum in Crimea."

Investors were also nervous due to tensions between Ukraine and Russia, which remained tense. Ukraine's government appealed for Western help on Tuesday to stop Moscow annexing Crimea but the Black Sea peninsula.

However, investors could get some comfort from a Reuters report that China's central bank is prepared to loosen monetary policy if economic growth slows further by cutting the amount of cash that banks must keep as reserves.

At 0726 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were 0.5 percent to 0.7 percent lower.   Continuación...