European Factors to Watch - Shares to fall on worries Fed may cut stimulus

Thu Feb 21, 2013 7:34am GMT

LONDON, Feb 21 (Reuters) - European stocks were seen opening lower on
Thursday on concerns that the U.S. Federal Reserve might scale back its assets
purchase programme, which has helped fuel a rally in equity markets since last
summer.
    Minutes of the latest Fed policy meeting published late on Wednesday showed
a number of officials think the central bank might have to slow or stop buying
bonds before seeing the pickup in hiring the programme is designed to deliver.
    
    At 0727 GMT, futures for the Euro STOXX 50 were down 0.8, contracts
for Germany's DAX and Britain's FTSE 100 fell 0.6 percent and
futures for France's CAC were 0.7 percent lower.     
    Cyclical shares were expected to come under pressure on worries a withdrawal
of the Fed's stimulus measures could dent global economic growth.
    "We are seeing banks and industrials indicated down," Ishaq Siddiqi, a
market strategist at spreadbetter ETX Capital said. 
    "I'd imagine it's going to be the traditional rotation out of cyclicals and
into defensives."
    U.S. shares extended losses after the minutes were published and the CBOE
Volatility index, or VIX, a measure of U.S. investor 'fear' closely
watched across the globe, jumped 19.3 percent - the biggest daily gain for the
VIX since November 2011.      
    The euro zone Euro STOXX 50 rallied 34 percent between June 2012
and January, boosted by expectations the Fed would buy assets to stimulate the
U.S. economy and the European Central Bank would support struggling countries in
the region.
    The blue-chip index closed down 0.8 percent at 2,640.35 points on Wednesday,
after failing to break a technical resistance at 2,670, corresponding to its
50-day average, in a sign buying momentum remained weak and the index may remain
stuck in the 2.8 percent range that has trapped for the past two weeks.
    The Euro STOXX 50 was down 4 percent from its late January peak, curbed by
unimpressive corporate earnings and concerns about general elections in Italy on
Feb. 24-25, where a fragmented new parliament may curb the pace of much needed
economic reforms. 
    The earnings picture remained blurred on Thursday, with the insurance sector
in focus as Europe's largest insurer Allianz beat estimates while No.2
AXA disappointed.  
    Reinsurer Swiss Re reported a better-than-expected net income.
 
    With the European earnings season approaching the halfway mark, 39 percent
of the STOXX Europe 600 companies that have reported so far miss
consensus estimates, StarMine data showed.

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 MARKET SNAPSHOT AT 0733
                                          LAST  PCT CHG   NET CHG
 S&P 500                              1,511.95  -1.24 %    -18.99
 NIKKEI                              11,309.13  -1.39 %   -159.15
 MSCI ASIA EX-JP   <.MIASJ0000PUS       554.37  -1.38 %     -7.74
                   >                                     
 EUR/USD                                1.3258  -0.17 %   -0.0022
 USD/JPY                                 93.41  -0.14 %   -0.1300
 10-YR US TSY YLD                        1.995       --     -0.02
 10-YR BUND YLD                          1.627       --     -0.04
 SPOT GOLD                           $1,567.50   0.33 %     $5.21
 US CRUDE                               $94.39  -0.87 %     -0.83
 
  
  GLOBAL MARKETS-Sentiment rattled by liquidation talk, Fed minutes  
  > Wall St slides as Fed minutes spark concern                      
  > Nikkei pulls back from 52-month highs; exporters weigh           
  > U.S. bond prices cling to gains after Fed minutes                
  > Euro extends losses, hits 6-week low vs dollar                   
  > Gold hits 7-month low on worries on fate of Fed's stimulus       
  > London copper dips to 2013 low as FOMC minutes spark selling     
  > Brent slips toward $115 as sell-off continues                    
    
    COMPANY NEWS
    ALLIANZ 
    Indicated 0.4 percent higher
    The insurance giant said it saw improving prospects for calm in the euro
zone as it reported a higher than expected fourth quarter net profit of 1.22
billion euros. 
    
    AXA 
    Europe's No. 2 insurer said its full-year 2012 net income fell 4 percent on
a like-for-like basis compared with a year-ago figure inflated by one-off gains
from asset sales. 
    
    CASINO 
    The French retailer said it was confident it would grow sales and profits
this year after it posted a 29.3 percent jump in 2012 operating profit as robust
growth in Latin America and Asia offset a weak home market. 
    
    SAFRAN 
    The French aerospace group posted a 24 percent rise in full-year operating
profit, lifted by demand for aircraft engines and maintenance, currency gains
and acquisitions. 
    
    DAIMLER 
    Indicated 0.3 pct lower
    Daimler's supervisory board is set to hold a meeting at which the extension
of Chief Executive Dieter Zetsche's contract is set to be discussed. Under
discussion is extending his contract by five years until the end of 2018, a
source familiar with the matter told Reuters. 
    Separately, Daimler also announced a partnership with Deutsche Telekom
 to promote new online services and web applications in motor vehicles.
    
    LUFTHANSA 
    Indicated 1 pct lower
    The airline's chief executive Christoph Franz told FAZ in an interview said
no decision had yet been taken over which aircraft the group would buy as part
of a plan to invest in 108 new planes. He said that Lufthansa's passenger
airline business in Germany was expected to make a loss in 2012. 
    
    SCHNEIDER ELECTRIC 
    The French industrial group predicted slow sales growth and stable margins
in 2013 as it reported a 10 percent rise in 2012 underlying profits despite a
weaker China and tough conditions in Europe. 
    
    TECHNIP 
    The French oil services group predicted revenue and profit would rise this
year after reporting forecast-beating 2012 sales on Thursday, escaping the
difficulties experienced by its bigger Italian rival Saipem.
 
    
    ATOS 
    The company forecast an improvement in its operating margin and slight
revenue growth this year after posting a 37 percent rise in 2012 operating
profit. 
    
    BNP PARIBAS, AGEAS 
    Belgian prosecutors have concluded that seven former directors of Fortis
should face trial for allegedly misleading investors during the Belgian-Dutch
bank's purchase of part of Dutch lender ABN AMRO and before its 2008 collapse.
 
     A dossier has been passed to a panel of judges who will determine whether
to order a trial, Brussels prosecutors said on Wednesday. They did not name the
former Fortis directors.
    
    CAPGEMINI 
    The French IT services group predicted organic revenue and operating margin
would edge higher this year thanks to a better geographic sales mix and clients'
appetite for cost-cutting services. 
    
    BANKINTER 
    Spanish bank Bankinter plans to list 49 percent of its insurance arm, Linea
Directa, within the next two or three years, Expansion reported, citing unnamed
market sources.
    
    DIA 
    Spain's deep recession helped profits at discount supermarket chain Dia rise
by over 55 percent in 2012 from a year earlier as adjusted core earnings beat
Reuters forecasts. 
    
    ABERTIS, REE, IBERDROLA 
    The Spanish government held a meeting with the Bolivian ambassador on
Wednesday to express its displeasure with Bolivia's seizure of assets belonging
to Spanish companies, the Foreign Ministry said in a statement.