GO
Loading...

European Factors to Watch-Shares to fall, focus on earnings

Thursday, 11 Oct 2012 | 1:38 AM ET

(Adds quotes, details, company news; updates snapshot table)

LONDON, Oct 11 (Reuters) - European equities were set to fall for a fourth straight session on Thursday, mirroring losses on Wall Street and in Asia, with concerns about weaker corporate earnings and global growth seen pushing shares towards one-month lows.

U.S. shares fell in the previous session, digesting disappointing news from Chevron

and Alcoa

as earnings season got under way. Alcoa, which posted a quarterly loss late on Tuesday, cut its outlook for global aluminum demand, citing a slowdown in China.

Analysts said that U.S. company results gave an early hint about European earnings, which will gather pace in the second half of October.

"The third-quarter earnings season in Europe is definitely going to be very difficult. We can't escape from recession and austerity in the region. Your home economy is struggling as well as demand from the rest of the world dropping back," Mike van Dulken, head of research at Accendo Markets, said.

SmartEstimates from Thomson Reuters StarMine show the July-September quarterly results could deliver an average negative earnings surprise from Euro STOXX 50

companies of 1.6 percent as companies faced a slowdown in economic growth.

The stock market is also expected to show a knee-jerk negative reaction to Standard & Poor's move to cut Spain's sovereign credit rating to BBB-minus, just above junk status. However, some analysts said that could prompt the country to seek a bailout, which could be positive for the stock markets.

"Investors believe this may be the straw that breaks the camel's back, as the higher bond yields expected to result from the downgrade could force the Spanish government to finally request a bailout," Capital Spreads said in a note.

Futures for Euro STOXX 50 , Germany's DAX and France's CAC

were down 0.3 to 0.7 percent. Financial spreadbetters earlier predicted Britain's FTSE 100

to fall as much as 0.3 percent.

The FTSEurofirst 300

index fell 0.5 percent at 1,090.03 points on Wednesday. A further drop of about 2 points would be the lowest level for the index in more than a month. Japan's Nikkei average fell 0.6 percent on Thursday. MARKET SNAPSHOT AT 0638 GMT LAST PCT CHG NET CHG S&P 500 1,432.56 -0.62 % -8.92 NIKKEI 8,546.78 -0.58 % -49.45 MSCI ASIA EX-JP -0.5 % -2.57 EUR/USD 1.2862 -0.09 % -0.0012 USD/JPY 77.97 -0.26 % -0.2000 10-YR US TSY YLD 1.677 -- 0.00 10-YR BUND YLD 1.454 -- -0.06 SPOT GOLD $1,765.36 0.19 % $3.42 US CRUDE $91.49 0.26 % 0.24

* Asian shares weak on growth woes, euro on backfoot

* Nikkei slips on earnings fears,heads for 3rd day of losses

* Blue chips Chevron, Alcoa lead Wall Street's sell-off

* Euro falls as worries over Spain, growth dent risk appetite

* Brent crude rises toward $115 as Mideast tensions support

* Copper steadies from two-week low, growth woes cap gains

* Gold rebounds from 4-day loss; euro zone gloom weighs

* Prices gain in thin volume on global growth fears

COMPANY NEWS CARREFOUR

Europe's biggest retailer said third-quarter like-for-like sales rose 0.2 percent as demand in austerity-hit Italy and Spain remained weak but its core French market showed signs of improvement.

BAE SYSTEMS

Britain's BAE Systems said on Thursday it was trading in line with expectations but noted that it faces uncertainty in its core United States market where a new government will have to tackle its federal deficit.

EADS , LAGARDERE

Europe's two biggest aerospace firms will go back to the drawing board to find new strategies after Germany stymied the world's biggest arms and aviation company merger. [ID:nL6E8LAOPN

Lagardere, the French media group, owner of 7.5 percent of EADS, renewed its support in the management of the Airbus maker after its merger talks with BAE Systems failed.

SIEMENS

Germany's Siemens may outline job cuts and office closures on Thursday to stop profits sliding as customers put off ordering engineering equipment because of Europe's economic crisis.

BURBERRY ,

The British fashion house, which warned on profit last month, confirmed retail sales growth slowed sharply in its second quarter as demand eased in the UK and China.

ROYAL BANK OF SCOTLAND

The bank set a price of 175 pence per share for the stock market listing of insurer Direct Line, close to the middle of the range originally set and valuing the business at 2.6 billion pounds ($4.2 billion).

SANOFI

The French drug maker has dropped plans to exit its research laboratory in the southern town of Toulouse as part of a reorganisation of its French research operations, Industry Minister Arnaud Montebourg said.

RENAULT , PSA PEUGEOT CITROEN

Europe's car market will not really recover without EU-led coordination of capacity cuts, Fiat

and Chrysler Chief Executive Sergio Marchionne said, in an apparent back-track on comments he made at the Paris auto show last month.

GDF SUEZ

GDF Suez' Belgian unit Electrabel said that it has closed its 350 MW combined-cycle gas turbine plant at Saint-Ghislain, near the French border, after an explosion earlier in the day.

ING

Pan Asian insurer AIA Group Ltd has agreed to buy ING's Malaysian insurance operations for $1.73 billion in cash, handing the Dutch financial services firm its first deal in a nine-month drive to sell off Asian assets.

OUTOKUMPU

The Finnish stainless steel maker's chief executive Mika Seitovirta and other top management receive bonuses to keep them in the company as it is acquiring ThyssenKrupp's

Inoxum unit, daily Helsingin Sanomat reported. DEUTSCHE TELEKOM

The shares of wireless service provider MetroPCS

closed down 4 about percent on Wednesday after a source said Sprint Nextel Corp is still weighing whether to make a counter bid for the company.

(Reporting by Atul Prakash; Editing by Toni Vorobyova)

((atul.prakash@thomsonreuters.com)(+44 20 7542 6189)(Reuters Messaging: atul.prakash.thomsonreuters.com@reuters.net))

Keywords: MARKETS EUROPE FACTORS