Europe Factors to Watch-Shares set to rise; BES in focus
PARIS, July 31 (Reuters) - European stocks were set to rise on Thursday, bouncing after the previous day's losses, while Portugal's Banco Espirito Santo will in focus after unveiling a massive loss and saying it will start a capital increase. Investors were combing through a batch in corporate results from blue-chips such as Sanofi, Anheuser-Busch InBev, Siemens, AstraZeneca and Royal Dutch Shell. At 0640 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were flat to up 0.3 percent. Banco Espirito Santo's new management said late on Wednesday that laws may have been broken at the bank during a catastrophic six months that saw it lose 3.6 billion euros ($4.8 billion). Shares in Banco Espirito Santo have plummeted 69 percent since mid-June. France's BNP Paribas will also be in the spotlight after it posted a second-quarter loss, reflecting the cost of an $8.95 billion fine for breaking U.S. sanctions, but the French bank said its strong underlying result was a sign clients had not been scared off by the affair. European companies with a strong exposure to Latin America, such as Telefonica and Banco Santander, will be eyed as Argentina defaulted for the second time in 12 years after hopes for a midnight deal with holdout creditors were dashed, setting up local stock and bond prices for declines on Thursday and raising chances a recession could worsen this year. Telefonica posted on Thursday a 15 percent drop in operating income in the second quarter, in line with forecasts, hit by weaker currencies in Latin America while margins remained pressured in some of its key markets. About 40 percent of STOXX Europe 600 companies have reported results so far in the earnings season, of which 55 percent have met or beaten profit forecast, according to Thomson Reuters StarMine data. On average, quarterly profits are up 7.1 percent year-over-year, data shows, fuelling hopes of a long-awaited recovery in European profits this year. On Wall Street on Wednesday, both the S&P 500 and Nasdaq ended higher after the U.S. Federal Reserve gave a rosier assessment of the economy while reaffirming that it was in no hurry to raise interest rates. The U.S. central bank also, as expected, reduced its monthly asset purchases to $25 billion from $35 billion. Europe bourses in 2014: (link.reuters.com/pad95v) Asset performance in 2014: (link.reuters.com/rav46v) ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0640 GMT: LAST PCT CHG NET CHG S&P 500 1,970.07 0.01 % 0.12 NIKKEI 15620.77 -0.16 % -25.46 MSCI ASIA EX-JP 510.21 -0.39 % -1.99 EUR/USD 1.339 -0.04 % -0.0006 USD/JPY 102.79 0.01 % 0.0100 10-YR US TSY YLD 2.551 -- 0.00 10-YR BUND YLD 1.175 -- 0.01 SPOT GOLD $1,294.10 -0.05 % -$0.60 US CRUDE $99.50 -0.77 % -0.77 > GLOBAL MARKETS-DOLLAR UP, U.S. YIELDS SURGE ON UPBEAT U.S. DATA > US STOCKS-S&P 500, NASDAQ END UP AS FED IN NO RUSH TO RAISE RATES > NIKKEI RISES TO FRESH 6-MONTH HIGH LED BY EXPORTERS, BANKS > FOREX-BULLISH DOLLAR ON GOOD US GROWTH, MORE DATA AWAITED > PRECIOUS-GOLD BELOW $1,300 AS U.S. ECONOMIC OPTIMISM DENTS DEMAND > METALS-COPPER UNDERPINNED AS FED RELAXES ON RATE RISE TIMING > BRENT SLIPS TOWARD $106 AS US FUEL DEMAND DISAPPOINTS COMPANY NEWS: BNP PARIBAS BNP Paribas turned in a second-quarter loss on Thursday, reflecting the cost of an $8.95 billion fine for breaking U.S. sanctions, but the French bank said its strong underlying result was a sign clients had not been scared off by the affair. SANOFI The French drugmaker raised its full-year guidance on Thursday after it posted stronger than expected quarterly earnings, driven by its rare disease business and higher sales in emerging markets. ANHEUSER-BUSCH INBEV The world's largest beer maker reported a greater second-quarter profit than expected on Thursday as the World Cup drove sales in Brazil and both China and Mexico outperformed. ROYAL DUTCH SHELL PLC Oil major Shell, which has been shedding assets to cut costs and streamline operations, reported a 33 percent increase in adjusted quarterly earnings after producing more liquids and selling at higher prices. ASTRAZENECA AstraZeneca smashed forecasts for second-quarter sales and earnings on Thursday, demonstrating resilience after seeing off a $118 billion takeover approach from rival drugmaker Pfizer two months ago. LLOYDS Lloyds Banking Group reported a 32 percent increase in underlying first-half profit, helping it absorb an increase in the cost of compensating customers mis-sold loan insurance. ROLLS ROYCE Engine maker Rolls-Royce said it was on track to meet forecasts for the year, as it reported an expected 20 percent drop in first-half profit due to shrinking government defence spending and currency headwinds. BAE SYSTEMS Europe's biggest defence contractor BAE Systems posted a 7 percent fall in half-year profit, as expected, hit by lower military spending in the U.S. and said on Thursday that its outlook for 2014 was unchanged. BG GROUP Oil and gas firm BG Group BG.L reported a 11 percent rise in second-quarter operating profit, driven by higher LNG volumes and higher realised prices in Asia and South America. CENTRICA British utility Centrica CNA.L posted a 35 percent fall in operating profits during the first half of the year as mild weather in Britain led to reduced demand and extreme weather in North America increased costs for the company. SCHRODERS UK fund manager Schroders said assets under management rose to a record 271.5 billion pounds ($459.35 billion) in the first half of the year, after net inflows more than offset a muted market performance. DIAGEO The world's largest distilled drinks maker by sales, posted weaker-than-expected earnings and sales on Thursday, hurt by a slowdown in China and volatility in other emerging markets. BT Strong demand for fibre broadband and television helped Britain's BT report first quarter results in line with forecasts, and to keep its outlook unchanged. UNIBAIL RODAMCO Europe's biggest real estate company has agreed to sell a portfolio of six shopping centres in France to Carmila, a real estate group backed by retailer Carrefour. SIEMENS Germany's warned on Thursday that its energy business faced challenges in the coming quarters as it reported quarterly core profit that fell short of expectations. SANTANDER The euro zone's biggest bank Santander posted a 38 percent jump in second-quarter net profit from a year ago, beating forecasts as provisions against soured debts fell. EDF Higher nuclear output in France and Britain drove state-controlled utility EDF's first-half net profit 8.3 percent higher to 3.1 billion euro (4.15 billion US dollar) and the group confirmed its full-year financial guidance. CARREFOUR The world's second-largest retailer, reported a 13.8 percent rise in first-half recurring operating profit to 833 million euros ($1.12 billion), driven by higher profitability in its core French business and in Brazil and Argentina, while China stayed under pressure. METRO AG the German retailer said conditions are still not right to list a stake in its Russian cash-and-carry business, that was postponed in March due to the Ukraine crisis. TELEFONICA The group posted on Thursday a 15 drop in operating income in the second quarter, in line with forecasts, hit by weaker currencies in Latin America while margins remained pressured in some of its key markets. JCDECAUX French outdoor advertising and street furniture group reported a 3.3 percent rise in first-half adjusted revenue to 1.3 billion euros (1.74 billion US dollar) on Thursday, but said organic growth would be slightly slower in the third quarter. SAFRAN The aerospace group raised its core profit target as it reported higher first-half earnings on Thursday. KERING The luxury and lifestyle group fulfilled its ambition of expanding in Swiss watchmaking with the acquisition of Ulysse Nardin, as it posted mixed first-half results that showed further weakness at its flagship Gucci brand. HOCHTIEF The German builder, majority-owned by Spanish building company ACS, reported on Thursday a 55 percent increase in second-quarter net income as restructuring of its Australian unit Leighton started to pay off. SAINT-GOBAIN The French building materials group reaffirmed its aim of improving its profitability this year after posting 4.1 percent organic sales growth in the first half, driven by demand in the United States and Asia. ALLIANZ Bill Gross, manager of the world's largest bond fund Pimco, said Wednesday that income, rather than capital gains, would drive future investment returns as a result of low global economic growth. ENI The Italian oil major said it had made a significant gas and condensate discovery offshore Gabon, with initial potential of gas estimated at 500 million barrels of oil equivalent. INGENICO The French payments firm raised its annual organic growth and operating margin targets after revenue rose sharply in the second quarter, helped by a transition to chip-and-pin payment terminals in the United States. VALLOUREC The steel pipes maker turned in a second-quarter net profit rise of 41.9 percent to 88 million euros and repeated its recent warning that challenges in Brazil will eat into its second half performance. ERSTE BANK Austria's Erste Group Bank swung to a first-half loss of 929.7 million euros ($1.25 billion) as it booked impairment charges and set aside 130 million euros for a Hungarian law forcing banks to compensate customers for mispriced loans. LUFTHANSA Europe's largest airline by revenue reported lower than expected second-quarter profit as ticket prices fell on North American, Asian and European routes. (Reporting by Blaise Robinson; Editing by Alistair Smout)
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