European Factors to Watch-Lower start eyed on German, French growth scare
LONDON, Aug 14 (Reuters) - European stocks were seen opening lower on Thursday as disappointing economic output data from the euro zone's two largest economies cast shadows on market bets on an economic recovery in the currency bloc. At 0645 GMT, futures for the Euro STOXX 50, Germany's DAX and France's CAC were down between 0.5 percent and 0.7 percent. September futures on Britain's FTSE 100 were down 0.3 percent. The German economy suffered a surprise contraction in the second quarter, its first in more than a year, as foreign trade and investment, particularly in the construction sector, weighed on growth in Europe's largest economy. France slashed its growth forecasts for this year and the next on Thursday after its economy failed to grow in the second quarter. "Data is getting weaker and this is no longer an environment where we are overweight equities," said Matthias Thiel, a strategist at M.M.Warburg & CO in Hamburg, who turned "neutral" on European equities last week. "Especially the German data is disappointing and this is why we see more risk to our scenario that there is a moderate recovery in the euro zone." A flash estimate of second-quarter euro zone economic growth is due at 0900 GMT. Economists had expected euro zone GDP to have expanded by 0.2 percent on the quarter in the three months to June, the same pace as seen in the first quarter. Some strong German corporate results was set to provide some support to the Dax, however. Shares in steelmaker ThyssenKrupp were seen opening 4 percent higher as the German group said it may return to a net profit this year, raising its outlook for a second time after restructuring at its steel mill in Brazil paid off and demand for elevators and chemicals plants bolstered earnings. German potash miner K+S was seen opening 1 percent higher after recording a higher-than-expected earnings before interest and tax in the second quarter. Europe bourses in 2014: (link.reuters.com/pad95v) Asset performance in 2014: (link.reuters.com/rav46v) ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0644 GMT: LAST PCT CHG NET CHG S&P 500 1,946.72 0.67 % 12.97 NIKKEI 15314.57 0.66 % 100.94 MSCI ASIA EX-JP 506.95 0.1 % 0.53 EUR/USD 1.3358 -0.04 % -0.0006 USD/JPY 102.49 0.08 % 0.0800 10-YR US TSY YLD 2.417 -- -0.01 10-YR BUND YLD 1.013 -- -0.02 SPOT GOLD $1,313.59 0.09 % $1.23 US CRUDE $97.14 -0.46 % -0.45 > SHARES, BONDS RALLY AS INVESTORS BANK ON ENDLESS STIMULUS > BIOTECHS LIFT WALL ST; DOW BACK IN BLACK FOR 2014 > NIKKEI EXTENDS RALLY, SUPPORTED BY PUBLIC BUYING HOPES > BOND YIELDS FALL ON WEAK DATA, 10-YEAR AUCTION SOLID > POUND HITS 4-MONTH LOW AFTER BOE'S DOVISH SHIFT, EURO EYES GDP > GOLD RETAINS GAINS ON SOFT U.S. DATA, SAFE-HAVEN DEMAND > LONDON COPPER SLIPS TO 7-WEEK LOWS ON CHINA WORRIES > BRENT FALLS BELOW $104 AFTER BRIEF RECOVERY FROM 13-MONTH LOW COMPANY NEWS: THYSSENKRUPP The German steelmaker said it may return to a net profit this year, raising its outlook for a second time as restructuring at its steel mill in Brazil paid off and demand for elevators and chemicals plants bolstered earnings. RWE RWE said its operating earnings fell 40 percent in the first half of 2014, putting it on track for its third straight year of declining profits as low wholesale power prices and demand continue to burden Germany's second-biggest utility. VIVENDI TELECOM ITALIA Telecom Italia Chief Executive Marco Patuano met Vivendi chairman Vincent Bollore on Wednesday to discuss an offer for the French group's Brazilian broadband unit GVT, two sources with knowledge of the matter said. K+S Operating profit at the German potash miner declined 3.3 percent as lower prices of the fertiliser mineral were partly offset by an insurance payment for an accident at one of its mines. AEGON The Dutch insurer reported a 7 percent rise in second-quarter profit, helped by a rise in deposits and gains in equity markets. MARKS & SPENCER The British retailer is close to having both its food and general merchandise divisions "firing on all cylinders" and expects a better Christmas after poor clothing sales hit last holiday season, according to its food business head. ERSTE GROUP, UNICREDIT Ratings agency Standard & Poor's has downgraded three systemically important Austrian banks - Raiffeisen Zentralbank Oesterreich, Erste Group and Unicredit Bank Austria - in response to new bail-in legislation. VOLKSWAGEN China will fine German premium auto brand Audi around 250 million yuan ($40.63 million) for violating anti-monopoly laws, the 21st Century Business Herald, an influential business daily, reported on Thursday. GDF SUEZ Colombian electricity company Celsia ES will buy stakes in power-generating facilities in Panama and Costa Rica from France's GDF Suez for $840 million, Celsia said in a filing with Colombia's financial regulator on Wednesday, the first time the company has expanded abroad. SANOFI, ROCHE, GSK, ACTELION U.S. biotechnology company InterMune Inc is working with financial advisers to evaluate strategic options as it braces for potential takeover interest from larger drugmakers, people familiar with the matter said. Separately, Bloomberg News reported on Wednesday that InterMune has drawn takeover bids from Sanofi SA, Roche Holding AG, GlaxoSmithKline Plc and Actelion Ltd. ELECTROLUX AB General Electric Co is reportedly in talks with Sweden's Electrolux AB and Quirky Inc to sell its household appliances unit, Bloomberg reported, citing people familiar with the matter. DEUTSCHE BANK Germany's biggest lender and shopping center operator ECE have signed a preliminary agreement to buy the building complex "Palais Quartier" in Frankfurt for 800 million euros ($1.07 billion) from Rabobank, Frankfurter Allgemeine Zeitung said on Thursday, citing sources. (Reporting by Francesco Canepa; Editing by Sudip Kar-Gupta)
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