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European Factors to Watch-Shares to fall on euro zone jitters
July 25, 2012 / 6:49 AM / 5 years ago

European Factors to Watch-Shares to fall on euro zone jitters

 (Adds detail, company news; updates snapshot table)
 LONDON, July 25 (Reuters) - European shares were set to fall for a fourth
straight session on Wednesday on mounting concerns that Spain, the euro zone's
fourth-largest economy, might need a full international bailout and Greece would
struggle to meet the terms of its aid package.
 Spain's borrowing costs have soared to levels that are not manageable
indefinitely, raising worries of a full bailout the euro zone can barely afford.
Madrid paid the second highest yield on short-term debt since the birth of the
euro at an auction of three- and six-month bills on Tuesday. 
 And three EU officials said inspectors from the European Union, European
Central Bank and International Monetary Fund were likely to conclude Greece
cannot repay what it owes, making a further debt restructuring necessary.
 "Overall, risk aversion is set to remain highly elevated as no resolution to
the euro zone crisis appears to come out soon," Credit Agricole analysts said in
a note.
 Futures for Euro STOXX 50, Germany's DAX and France's CAC
 fell 0.4 to 0.7 percent, while financial spreadbetters earlier predicted
Britain's FTSE 100 to fall as much as 0.4 percent.
 Technology shares will be in focus after results from Apple, the
world's most valuable technology company, fell short of Wall Street's
expectations as revenues slipped from the previous quarter. Its shares fell more
than 5 percent on Wall Street in late trade on Tuesday, while its
Frankfurt-listed shares were down 6 percent on Wednesday.
 "The negative effects of a 'market darling' disappointing the market are set
to be felt on the open on both sides of the Atlantic," IG Markets said in a
 U.S. futures   were down 0.2 to 0.8 percent, while Japan's
Nikkei average fell 1.4 percent.  
 The FTSEurofirst 300 fell 0.6 percent at 1,018.61 in the previous
session, having slipped 2.4 percent on Monday. Spain's IBEX 35 dropped
3.6 percent, whilst Italy's FTSE MIB shed 2.7 percent to close at its
lowest level since the launch of the euro, as many see Italy as the next
potential bailout candidate after Spain.
 Global growth worries have also been hurting sentiment, with investors
staying cautious following some recent poor data from the world's top two
economies - The United States and China. The International Monetary Fund said
China's economy was set for a soft landing and urged further reform and currency
appreciation to rebalance growth and reduce risks. 
 Investors will keep a close eye on company earnings, which came in mixed on
Wednesday. Spain's sunken real estate market nearly halved first half profit at
Sabadell, after the lender took a big hit from potential losses on
toxic property assets.
 PSA Peugeot Citroen detailed first-half losses and announced 1.5
billion euros in further savings, while Germany's Daimler stuck to
its forecast for roughly flat underlying profits this year.
 According to Thomson Reuters StarMine data, of the 18 percent European
companies on the STOXX Europe 600 index that have reported
second-quarter results so far, 56 percent beat or met expectations, while 44
percent missed.
  MARKET SNAPSHOT AT 0638 GMT                                   
                                              LAST     PCT CHG    NET CHG
  S&P 500                                 1,338.31      -0.9 %     -12.21
  NIKKEI                                  8,365.90     -1.44 %    -122.19
  MSCI ASIA EX-JP                                      -1.05 %      -4.94
  EUR/USD                                   1.2066      0.06 %     0.0007
  USD/JPY                                    78.15     -0.03 %    -0.0200
  10-YR US TSY YLD                           1.388          --       0.00
  10-YR BUND YLD                             1.228          --      -0.02
  SPOT GOLD                              $1,582.00      0.14 %      $2.16
  US CRUDE                                  $87.92     -0.66 %      -0.58
 * Shares fall as worries about Spain intensify               
 * Nikkei skids towards year-lows                             
 * Euro hovers near 2-year lows as Spanish worries unabated   
 * Wall St falls as Europe hits earnings; Apple falls         
 * Copper steadies from one-month low; debt woes weigh        
 * Gold edges higher for 2nd day, stimulus hopes support      
 * Brent steady at $103 on worries about euro zone            
 * U.S. 10-year yields touch record low                       
 The car maker detailed first-half losses and announced 1.5 billion euros in
further savings as it presses ahead with politically fraught restructuring
 The world's largest steelmaker forecast tough market conditions would
continue into the second half of the year, particularly in Europe, after a
divestment gain swelled second-quarter earnings and helped it cut debt.
 Spain's sunken real estate market nearly halved first half profit at
Sabadell's after the lender took a big hit from potential losses on toxic
property assets, which are likely to drag on earnings across the country's
banking sector. 

 Germany's largest bank became the latest global investment bank to post weak
second quarter pretax profit late on Tuesday, as the flagging euro and lower
trading activity hit earnings. 

 The maker of Mercedes-Benz cars stuck to its forecast for roughly flat
underlying profits this year, when it posted on Wednesday a decline in
second-quarter results that exceeded already downbeat market expectations.
 Sanofi Pasteur, the vaccines division of Sanofi, said its dengue vaccine
candidate proved in a study to be effective against the disease with an
"excellent safety profile". 
 Germany's largest drugmaker, Bayer AG, is in concrete talks to
sell its blood glucose meters business, with interested parties including Sanofi
 and Japan's Panasonic, the Financial Times Deutschland
reported, citing industry and financial sources. 
 The company had to rely on deep cost cuts in the first quarter to lift core
earnings 2 percent after tough conditions in southern Europe and the financial
sector hit overall revenues. 
 Swiss drug industry supplier Lonza confirmed its profit guidance
on Wednesday and said demand in its key business remained strong despite
macroeconomic uncertainties.
 Shipments of the French oil company's Usan oil grade will be delayed by
around 10 days in August due to lower than expected production, trade sources
said. Nigeria's newest offshore oil platform Usan began pumping oil in February
and is slowly ramping up production to 180,000 barrels per day. Total was not
immediately available for comment. 
 The world's No.2 maker of polysilicon scrapped its sales outlook for the
ongoing year, blaming the solar sector's ongoing consolidation that has pushed
many of its clients into crisis or out of business. 
 Britain's ARM Holdings beat market expectations for the second-quarter after
demand for its low power chips in smartphones and tablets continued to outstrip
the industry, providing a firm foundation against growing signs of weakening
consumer demand. 
 Italy's Banca Popolare di Milano is planning to cut 700 jobs and
refocus on traditional local banking as the mid-tier lender strives to redress
years of poor management. Bank management will present the plan on Wednesday

 (Reporting by Atul Prakash)

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