Europe Factors to Watch-Shares seen mixed; eyes on G20

Fri Feb 15, 2013 7:49am GMT

PARIS, Feb 15 (Reuters) - European stocks were seen mixed on Friday
following the previous day's dip as investors combed through earnings from
companies such as Anglo American, Commerzbank and PPR
 and kept an eye on the G20's Moscow meeting.
    At 0740 GMT, futures for Euro STOXX 50 were down 0.18 percent, for
Germany's DAX up 0.02 percent and for France's CAC were down
0.12 percent.
    Investors awaited reactions from officials at the G20 meeting on Friday and
Saturday in Moscow about recent currency swings. Tension between Washington and
Tokyo has risen over new Prime Minister Shinzo Abe's bold measures to stop
deflation, which have sparked a sell-off in the yen. 
    On Tuesday, the G7 issued a joint statement reaffirming "our longstanding
commitment to market-determined exchange rates", but the image of unity was
quickly undermined by off-the-record briefings critical of Japan, and equity
investors have been worrying about the impact of sharp currency swings on
companies' balance sheets.
    "Traders settle into their ringside seats for the G20 meeting," Jonathan
Sudaria, trader at Capital Spreads, wrote in a note.
    "Nations on the other side of competitive devaluations are beginning to lose
patience as their economies suffer, and traders will be on the look-out for the
war drums of retaliation."
    German Finance Minister Wolfgang Schaeuble said on Friday morning that
exchange rates should reflect market conditions.
    "We don't want government intervention in exchange rates. We want
market-orientated exchange rates," Schaeuble told Germany's Inforadio.
    The banking sector will be in the spotlight after Commerzbank,
Germany's second-biggest lender, said it would set aside slightly more money for
bad loans this year as the economic environment deteriorates. 
    Miners will also be in the spotlight after Anglo American posted a
sharp drop in 2012 earnings, hit by tumbling earnings from all core units and
writedowns to the value of its troubled platinum assets and the flagship Minas
Rio iron ore project in Brazil. 
    About 50 percent of STOXX Europe 600 companies have reported
results so far in the earnings season, of which only 53 percent have met or
beaten forecasts, a stark contrast with Wall Street where 76 percent of S&P 500
 companies have reported results, of which 77 percent have met or beaten
consensus, according to Thomson Reuters data.
    European shares retreated on Thursday, with the euro zone's blue chip Euro
STOXX 50 losing 0.8 percent, after weaker-than-expected euro zone
growth data hit investor sentiment. Despite the day's losses, the index remains
about 4 percent below an 18-month high hit in late January.
    "There's a bit of complacency in the market, which seems to bet on a very
strong economic recovery like we saw in 2009, but the situation is very
different," Fidelity fund manager Vincent Durel said.
    "There is a de-correlation with what equity analysts are forecasting in
terms of earnings. The market is driven by flows, by the drop in risk premiums
and the rise in valuation ratios."
           
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 MARKET SNAPSHOT AT 0740 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,521.38   0.07 %     1.05
 NIKKEI                             11,173.83  -1.18 %  -133.45
 MSCI ASIA EX-JP                       558.26   0.18 %     1.01
 EUR/USD                               1.3372   0.09 %   0.0012
 USD/JPY                                92.44  -0.44 %  -0.4100
 10-YR US TSY YLD                       1.986       --    -0.01
 10-YR BUND YLD                         1.619       --    -0.02
 SPOT GOLD                          $1,633.34  -0.07 %   -$1.12
 US CRUDE                              $97.18  -0.13 %    -0.13
 
  > GLOBAL MARKETS-Weak Europe weighs on markets before G20 
  > US STOCKS-Wall St ends slightly higher, helped by acquisitions 
  > Tokyo's Nikkei share average closes down 1.18 pct 
  > TREASURIES-Bonds extend gains in Asia on Europe data, auction 
  > FOREX-Yen firms as market awaits currency signals from G20 
  > PRECIOUS-Gold heads for biggest weekly drop since December 
  > METALS-Copper edges up on China prospects; euro woes cap gains 
  > Brent steady at $118, heads for first weekly loss in five 
    
    COMPANY NEWS:
    
    ANGLO AMERICAN 
    The global miner posted a sharp drop in 2012 earnings, hit by tumbling
earnings from all core units and writedowns to the value of its troubled
platinum assets and the flagship Minas Rio iron ore project in Brazil. 

     BANCA MONTE DEI PASCHI DI SIENA 
    Italian police arrested the former head of Monte dei Paschi's finance
department, who is at the centre of an inquiry into alleged fraud and bribery at
Italy's third largest bank.  
   Separately, Italian prosecutors investigating Monte dei Paschi di Siena have
sent a written request to speak to Santander Chairman Emilio Botin as a
witness as part of their probe into alleged fraud and bribery at the Tuscan
lender, a judicial source said on Thursday. 

    PSA PEUGEOT CITROEN 
   Standard & Poor's on Thursday cut its rating on the French automaker's debt
by a notch to BB-, pushing it further into "junk" territory. 
   The French government named a mediator to broker talks at Peugeot's Aulnay
plant as tensions worsened between workers willing to accept terms of the
carmaker's restructuring plan and unionists fighting against it. 
    
    PPR 
    The French luxury and sports brand group posted a forecast-beating annual
operating profit as the resilient growth of its fashion labels helped make up
for lower profitability at its Puma sports brand. 
    
    SULZER 
    The company achieved order intake and sales of over 4 billion Swiss francs
in 2012, while profitability remained stable in the double-digit range, the
company said on Friday. 
    
    ENI 
    The company said on Friday it expected to produce more oil and gas this year
after its adjusted profits in the fourth quarter rose 3.6 percent. 
    
    BANKIA 
   Spanish lender Bankia has hired Rothschild as an adviser to help it sell its
stakes in several companies, including Mapfre and Iberia,
newspaper Expansion reported. Nationalised Bankia has to sell the stakes as it
shrinks to meet the conditions of a European rescue. 
   Bankia shares closed down about 12 percent on Thursday after Spain's bank
restructuring fund FROB warned existing shareholders would be heavily diluted in
a recapitalisation. 
    
    AKER SOLUTIONS 
    Oil services firm predicted robust growth for 2013 and lifted its dividend
even as it missed analysts' fourth-quarter profit expectations. 
    
    RIO TINTO 
    Rio Tinto has signed a 20-year contract with Japan's Mitsui O.S.K. Lines Ltd
(MOL) to carry iron ore from Australia to China, as the world's No 3
miner takes advantage of a shipping market downturn to secure low freight rates.
 
  
    EDF 
    The utility, which surprised markets with a dividend hike, said the French
government - which controls 84.4 percent of the company - would exercise its
right to take a portion of its payout in shares. 
    
    FINMECCANICA 
   The defence group's chief executive Giuseppe Orsi will be questioned by
magistrates on Friday over allegations he paid bribes to win an 560-million-euro
contract to supply helicopters to the Indian Army. 
   
    PARIS ORLEANS 
    The parent company of boutique investment bank Rothschild, on Thursday
reported a 22 percent rise in quarterly revenues, helped by its role as an
advisor on some major European M&A deals.