April 19, 2016 / 5:21 AM / 2 years ago

European Factors to Watch-Shares seen higher, focus on earnings

(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report)

LONDON, April 19 (Reuters) - European equities were expected to set a new one-month high on Tuesday, tracking gains on Wall Street and in Asia, with a recovery in crude oil prices and some encouraging company results seen supporting the market.

At 0655 GMT, futures for the Euro STOXX 50, Germany’s DAX, France’s CAC and Britain’s FTSE were 0.2 to 0.5 percent.

Energy shares will be in focus after oil prices gained following an oil worker strike in Kuwait that cut huge amounts of crude out of the supply chain. The country’s oil production fell to just 1.1 million barrels per day (bpd), down from 2.8 million bpd usually.

On the company updates front, Roche reiterated that it expects to achieve its full-year targets after sales during the first three months of 2016 rose 4 percent, while Danone said underlying first-quarter sales rose 3.5 percent, beating expectations.

European technology companies will also be in focus after International Business Machines, the world’s largest technology services company, reported its worst quarterly revenue in 14 years, sending shares down nearly 5 percent in extended trading.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 percent, after touching its highest intraday levels since November, while Japan’s Nikkei stock index was up 3.7 percent, a day after it fell 3.4 percent as investors assessed the impact of earthquakes in southwestern Japan’s Kyushu on manufacturers’ supply chains.

In the United States, the Dow Jones industrial average climbed to a nine-month high on Monday as investors braced for a flurry of quarterly earnings reports through the week.

The pan-European FTSEurofirst 300 index hit a one-month high in the previous session before closing 0.4 percent higher at 1,355.26 points.


The Swiss drugmaker reiterated that it expects to achieve its full-year targets after sales during the first three months of 2016 rose 4 percent, beating analyst expectations. Shares were seen opening up 1.5 percent in premarket indicators at 0602 GMT.


The global miner cut its 2017 production guidance from its Australian iron ore mines due to a delay in the rollout of its autonomous transport technology, based on driverless trains.


Associated British Foods, owner of the Primark clothing chain, maintained full-year guidance after it beat forecasts with a 3 percent rise in first-half profit.


The brewer, which is in the process of acquiring rival SABMiller, said it accepted an offer from Japan’s Asahi Group for Peroni and a group of other SAB beer brands.


The Swiss bank went to trial in the United States on Monday over $2.1 billion in losses that investors incurred on mortgage-backed securities after the collapse of the U.S. housing market.


A federal judge on Monday cleared the way for Pacific Investment Management Co to pursue a California lawsuit accusing American International Group Inc of causing big losses by lying about its subprime mortgage exposure before its 2008 bailout.


The French cosmetics company pledged to outperform the market in 2016 and confirmed its ambition to achieve another year of sales and profit growth after first-quarter sales rose more than expected.


The yoghurt maker said underlying first-quarter sales rose 3.5 percent, beating expectations and lifted by baby food sales in Asia and strong demand for dairy products in North America.


The ad group reported higher first-quarter revenue on Tuesday, helped by accounts won at the end of last year and growth at digital business Sapient, and said it would complete its reorganisation by the summer.


Europe’s biggest dedicated online fashion retailer Zalando saw sales growth slow in the first quarter after a blistering 2015, but said it had accelerated again since the Easter holidays in late March, helping it reiterate its annual targets.


Emerging markets-focused asset manager Ashmore said on Tuesday that assets under management had risen by $1.9 billion in the three months to end-March as market gains more than offset further client outflows.


The French spirits group kept its target for full-year current operating profit growth after cognac sales accelerated in the fourth quarter, lifted by robust U.S. demand for brands like 1738 Accord Royal cognac and improving trends in China.


The Dutch navigation systems company on Tuesday reported first-quarter growth at the automotive and digital mapping licensing businesses that are widely seen as its future, while its consumer GPS sales continued to shrink.


The drugmaker said it would invest 300 million euros to expand a Belgian site specialised in making treatments for rare diseases.


Dutch paint and industrial coatings firm Akzo Nobel narrowly beat analyst expectations for the first quarter, reporting operating profit before incidentals of 334 million euros ($378 million) despite a fall in sales.


The French government will discuss financing options for state-controlled utility EDF this week ahead of an EDF board meeting on Friday, but no decision is due about the company’s project to build nuclear reactors in Britain.


The German engineering giant teamed up with French auto supplier Valeo to make engines for electric and hybrid cars, the companies said in a joint statement on Monday.


The European Union should consider allowing member states to subsidise their steel industries, which are suffering from a collapse in prices and carbon regulation, European Commissioner Elzbieta Bienkowska told the Frankfurter Allgemeine Zeitung.


Volkswagen’s management board should volunteer to cut their bonus payments, the company’s powerful labour chief Bernd Osterloh told German daily Handelsblatt.


Bilfinger has agreed to sell part of its Power unit - Helmut Mauell GmbH, which has been the subject of compliance complaints - back to its previous owners, it said, confirming a report in Tuesday’s Handelsblatt. Mauell has around 400 staff and made sales of 40 million euros ($45.3 million) in 2015, Handelsblatt said.


The chemicals group plans to appoint strategy chief Christian Kullmann to succeed Chief Executive Klaus Engel, daily Rheinische Post reported on Tuesday, citing political sources.


Metro Chief Executive Olaf Koch underlined in an interview with Sueddeutsche Zeitung the importance of cutting costs at hypermarket chain Real. “We want to invest. But we need competitive costs. Otherwise this won’t work,” he said.


Europe’s biggest dedicated online fashion retailer saw sales growth slow in the first quarter after a blistering 2015, but said it had accelerated again since the Easter holidays in late March, helping it reiterate its annual targets.


The biotech company announced a five-year agreement to manage the compound collection of Pierre Fabre Laboratories, France’s second-largest private pharma group, at its compound management facility in Toulouse.


The company unveiled a joint venture in Africa with Lloyd’s of London insurer Chaucer in a bid to enter the “growing and profitable” specialty insurance market covering a range of political, energy and infrastructure risk.

ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets for site in development). In a real-time, multimedia format from 0600 London time through the 1630 closing bell, it will include the best of our market reporting, Stocks Buzz service, Eikon graphics, Reuters pictures, eye-catching research and market zeitgeist. Breaking news and dramatic market moves will continue to be alerted to all clients and we will continue to provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this, please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA. (Reporting by Atul Prakash; Editing by Sudip Kar-Gupta)

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