April 29, 2016 / 5:31 AM / 2 years ago

European Factors to Watch-Shares seen lower, 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 29 (Reuters) - European equities headed for a lower start on Friday, tracking losses on Wall Street and in Asia, with investors focusing on company results for hints about the market’s direction in the near term.

Futures for the Euro STOXX 50, Germany’s DAX, France’s CAC and Britain’s FTSE were 0.6 to 1.1 percent lower.

On the earnings front, BASF, the world’s largest chemical company by sales, reported an 8 percent decline in quarterly underlying operating profit. However, the decline was smaller than feared.

AstraZeneca’s underlying earnings fell 12 percent in the first quarter, broadly in line with analyst expectations, hit by drug patent expiries.

In the United States, U.S. stocks closed down on Thursday as the Bank of Japan’s shocking call to cap monetary stimulus continued to rattle investors, while a late day decline in Apple shares on remarks by billionaire investor Carl Icahn added to selling pressure.

However, Amazon sweetened the mood a little after the close by blowing away earnings expectations for its first quarter, sending the stock up almost 13 percent.

Asia shares were under pressure, with MSCI’s broadest index of Asia-Pacific shares outside Japan falling 0.4 percent.

The pan-European FTSEurofirst 300 index, which hit a three-month high last week, closed 0.2 percent higher.

On the data front, German retail sales dropped by 1.1 percent in March, their biggest monthly fall in 1-1/2 years, casting a shadow over expectations that consumer spending will propel growth in Europe’s largest economy as foreign trade weakens.


The world’s largest chemical company by sales reported an 8 percent decline in quarterly underlying operating profit as lower crude prices weigh on its oil and gas division. However, the numbers were smaller than feared.


The drugmaker’s underlying earnings fell 12 percent in the first quarter, broadly in line with analyst expectations, hit by drug patent expiries.


The world’s second-largest reinsurer Swiss Re SRENH.S said on Friday it expected challenging market conditions to continue throughout 2016 as it posted a smaller-than-expected drop in first-quarter net income.


The drugmaker said it was confident of winning the support of Medivation shareholders for a possible takeover of the U.S. cancer drug company as it reported higher quarterly profit, helped by its Genzyme unit.


Part-nationalised Royal Bank of Scotland risks missing an end-2017 deadline to sell its Williams & Glyn brand, it said on Thursday, raising doubts about how soon it will be ready to pay dividends and return to private ownership.


Italian oil and gas group Eni swung to a net loss in the first quarter of 792 million euros ($902 million) from a profit of 832 million euros a year earlier due to weak oil prices and a charge on its Saipem holding.


The French gas and power group said first-quarter core earnings decreased 1.7 percent to 3.6 billion euros and revenue dropped 14.3 percent to 18.9 billion due to falling power prices.


The French retailer said it closed the sale of Big C Vietnam to Central Group, for an enterprise value of 1 billion euros. It said it expected proceeds of 920 million.


The energy products distributor confirmed its 2016 targets after first-quarter recurring net profit rose 13.5 percent.


Fiat Chrysler Automobiles NV is in late-stage talks with Alphabet Inc’s self-driving car division for a technology partnership, the Wall Street Journal reported, citing a person familiar with the discussions.


The digital security company confirmed its 2016 forecasts after it posted flat first-quarter sales at constant exchange rates.


The French asset manager said first-quarter net income rose 1 percent as a corporate tax cut in France helped partly offset “a challenging market environment” and risk aversion among retail clients.


The French state-controlled nuclear group said first-quarter sales from its nuclear fuel and uranium unit as uranium deliveries slowed.


Spain’s state-owned lender Bankia posted on Friday a 3.3 percent fall in first quarter net profit from a year earlier as lower provisions offset pressure from low interest rates.


Spain’s Banco Popular posted on Friday a 2.6 percent rise in first quarter net profit from a year earlier, as lower revenues were offset by less provisions for bad loans.


IAG said on Friday Q1 operating profit was 155 million euros compared to a consensus forecast of 145 million euros.


Spain’s Telefonica on Friday posted a 6.7 percent drop in first-quarter core profit to 3.376 billion euros , just missing forecasts as lower currencies in key overseas markets more than offset a slight business growth.


Australian immigration detention camp operator Broadspectrum Ltd agreed to support a A$769 million ($586 million) bid from Spain’s Ferrovial SA after Papua New Guinea vowed to shut its camp there, sending its share price soaring.


The construction company posted a 1.8 percent decline in first-quarter sales as a weaker contracting business, which includes construction and road building, outpaced a robust concessions activity.


Three major European utilities including EDF Italian unit Edison are lining up rival bids for a big chunk of Italian oil major Eni’s retail gas and power business, sources said, in a deal that could be worth up to $3.4 billion and reshape the Italian retail energy industry.


France will lend up to 200 million euros to New Caledonia nickel producer Societe Le Nickel (SLN), a unit of French company Eramet, Prime Minister Manuel Valls said.


The group reported first-quarter core profit slightly above expectations and affirmed its guidance for the full year.


Workers in the German metals and electrical industries staged strikes on Friday after rejecting an offer from employers in wage negotiations.


Some cars on French roads do not meet carbon dioxide limits, but the government said it had not found any equipped with software to cheat pollution tests.


The bank said late on Thursday that Georg Thoma, head of the supervisory board’s integrity committee, will resign, days after a dispute in Deutsche Bank’s supervisory board surfaced.


Chief financial officer Richard Aa and general counsel Paal Wien Espen resign after beeing criticised by auditors Deloitte for their handling of warnings by an internal whistleblower about corruption allegations at Amsterdam-based Vimpelcom .


The Danish bank reported a first-quarter pre-tax profit ahead of expectations on Friday.


The Danish drugmaker said its 2016 earnings before interest and taxes would grow at a slower pace than earlier anticipated as it reported a first-quarter operating profit roughly in line with expectations.

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

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