LONDON, April 11 European shares were set to fall further on
Wednesday after hitting 12-week lows in the previous session, with a sharp rise
in Spanish and Italian bond yields and worries over global growth prompting
investors to move out of riskier assets.
Futures for Euro STOXX 50, Germany's DAX and France's CAC
were down 0.4 to 0.6 percent. Financial spreadbetters earlier predicted
Britain's FTSE 100 to open as much as 0.4 percent lower.
"Amid fears that Europe's sovereign debt crisis is taking another turn for
the worse, and (with the market) facing the prospects of a U.S. earnings season
bereft of any meaningful EPS growth, debate has intensified (about whether)
global equities are set for a period of medium-term weakness," Cameron Peacock,
analyst at IG Markets, said in a note.
"Unfortunately, the negative sentiment looks set to continue beyond a couple
Focus has shifted back to the euro zone's sovereign debt crisis, with
Spanish bond yields rising to within a whisker of six percent. The euro zone's
struggling "peripheral" economies are already battling with dwindling growth in
the face of harsh budget cutbacks.
Japan's Nikkei fell 0.8 percent on Wednesday, while the FTSEurofirst
300 index of top European shares finished 2.5 percent down on Tuesday
at 1,026.15 points, the lowest close since mid-January. It has fallen 7.5
percent since hitting an eight-month high in March and is up just 2.5 percent
this year. U.S. shares ended 1.7 to 1.8 percent lower.
The equity market's technical picture has deteriorated, with the euro zone's
blue-chip Euro STOXX 50 index falling 3 percent to 2,321.53 points
to close below its 200-day moving average in the previous session. A fall below
its January low of 2,307 could open the door for more weakness, charts showed.
Investors will keep a close eye on the earnings season, which is expected to
be mixed. Japan's Sony Corp flagged a record $6.4 billion annual net
loss, double an earlier forecast and a fourth straight year of red ink.
However, U.S. company Alcoa surprised Wall Street on Tuesday with a
first-quarter profit after a loss in the fourth quarter of 2011. The company,
which makes aluminum for aircraft, cars and beverage cans, raised its 2012
global growth forecast for the aerospace market by 3 percentage points to 13-14
On the macroeconomic front, focus will be on March U.S. import and export
prices, due at 1230 GMT. March's Federal Budget and the latest Federal Reserve
Beige Book both will be published at 1800 GMT.
MARKET SNAPSHOT AT 0630 GMT
LAST PCT CHG NET CHG
S&P 500 1,358.59 -1.71 % -23.61
NIKKEI 9,458.74 -0.83 % -79.28
MSCI ASIA EX-JP <.MIASJ0000PUS -0.69 % -3.53
EUR/USD 1.3104 0.18 % 0.0023
USD/JPY 80.92 0.27 % 0.2200
10-YR US TSY YLD 2.003 -- 0.02
10-YR BUND YLD 1.663 -- 0.00
SPOT GOLD $1,656.60 -0.2 % -$3.25
US CRUDE $101.27 0.25 % 0.26
* Shares fall on growth, euro zone debt worries
* Nikkei likely to mark 7th day of losses, Sony falls
* Yen buoyed near multi-week high as risk aversion climbs
* Brent steady at $120; demand growth worries weigh
* Gold edges down after 4-day winning run
* LME copper edges up after sell-off, Shanghai down
* Dow, S&P fall for fifth day, but Alcoa up late
* Global growth worries push yields to 4-week lows
The global miner said on Wednesday it has approved $708 million in pre
commitment funding for the Mad Dog Phase 2 oil project in the deepwater Gulf of
Garuda Indonesia will buy 11 Airbus A330 passenger jets from
European planemaker Airbus worth about $2.5 billion at list prices, Indonesia's
state enterprises minister Dahlan Iskan told Reuters on Wednesday.
A U.S. federal judge ruled on Tuesday in favor of Swiss bank UBS AG in a
lawsuit brought by Igor Olenicoff, a billionaire former client who ran afoul of
the tax-collecting Internal Revenue Service and tried to blame the bank. For
related news, click on
Germany's flagship lender will ask its annual general meeting to vote to
allow Deutsche to issue notes that could be converted into 90 million new
shares, according to an invitation to the event.
Swiss fragrance and flavour maker Givaudan confirmed its mid-term
goals after posting a 4.7 percent increase in first-quarter sales on Wednesday,
just ahead of the average estimate in a Reuters poll. For related news, click on
SGS, the world's largest inspection services company, said on Wednesday it
had bought South African metallurgical testing laboratory Metlab. For related
news, click on
The French company has agreed to buy UK construction group Thomas Vale to
expand its geographic presence in the British market.
Technip said on Wednesday it was awarded by Inpex Corporation a flexible pipe
supply lump sum contract for the Ichthys gas field, in Australia.
Struggling cellphone maker Nokia disclosed a software bug in its new
flagship Lumia 900 model, dealing a setback to its ambitions to re-enter the
U.S. smartphone market.
Finnish forestry cooperative Metsaliitto and M-real said they will sell a
24.9 percent stake in pulp firm Metsa Fibre for 472 million euros ($617.5
million) to Japan's Itochu Corporation.
The German software company said it will buy Syclo, a provider of enterprise
mobile applications and technologies, in a deal whose financial terms were not
Swedish medical technology firm Getinge said on Wednesday its first-quarter
profit would be between 560-570 million Swedish crowns ($82-84 million), below
analysts' expectations, and repeated its outlook for the full year.
(Reporting by Atul Prakash)