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European Factors to Watch-Shares to edge up on better earnings
July 17, 2013 / 5:17 AM / 4 years ago

European Factors to Watch-Shares to edge up on better earnings

LONDON, July 17 (Reuters) - European stocks are set to open higher on
Wednesday, as improved earnings reports set a positive tone to start a session
which could be cautious ahead of the top U.S. central banker's testimony to
    At 0622 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were 0.1-0.3 percent
    Swiss health care firm Novartis and tech firm ASML both
increased their full-year outlooks after reporting expectation-beating sales
figures, just a session after caution over the earnings of stocks such as
Swedbank prompted a 0.7 percent fall on the FTSEurofirst 300
    Also helping sentiment was heavyweight miner BHP Billiton, which
reported record iron ore output, echoing a good report from Rio Tinto on
    "Iron ore output was above expectations, like Rio, so it should react
positively there... Miners are down 30 percent this year, so out of everything
that is exposed to China, there are sectors which are more at risk, such as cars
and luxury," Nick Xanders, who heads up European equity strategy at BTIG, said,
adding that Novartis' results would help its share price keep going up.
    Volume could be light in early trade, however, with investors keen not to
place strong bets either way ahead of a testimony by U.S. Federal Reserve
Chairman Ben Bernanke, who is expected to balance a message of enduring central
bank support for the U.S. economy with a reminder that the Fed's ultra-easy
policies cannot last forever when he speaks at 1400 GMT. 
    The FTSEurofirst was spurred to five year highs by the Fed's open-ended
asset purchase programme, but has lost 5.4 percent in two months since Bernanke
first suggested it was to be scaled back, in a period of volatility where the
Fed has been criticised for a lack of consistency in statements. 
    "Over the last two months, markets have interpreted Bernanke's words as
initially hawkish and then swung round to the dovish case and tension is brewing
as to what mood he is in today," Jonathan Sudaria, trader at Capital Spreads,
said in a trading note.
    "However, having seen the volatility induced by his remarks, Bernanke is
likely to try and strike a chord right down the middle, reiterating the
'tapering not tightening line' and reminding markets that accommodative monetary
policy will end one day, but not for some time."
 MARKET SNAPSHOT AT 0624 GMT                                  
                                               LAST  PCT CHG   NET CHG
 S&P 500                                   1,676.26  -0.37 %     -6.24
 NIKKEI                                   14,615.04   0.11 %     15.92
 MSCI ASIA EX-JP                             518.04   0.09 %      0.47
 EUR/USD                                     1.3139  -0.17 %   -0.0022
 USD/JPY                                      99.32   0.23 %    0.2300
 10-YR US TSY YLD                             2.526       --     -0.01
 10-YR BUND YLD                               1.554       --      0.01
 SPOT GOLD                                $1,288.21  -0.29 %    -$3.78
 US CRUDE                                   $105.41  -0.56 %     -0.59
  > Asian shares rise, dollar steady before Bernanke testimony    
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  > Nikkei falls on weak global shares, strong yen            
  > TREASURIES-U.S. bond prices firm before Bernanke testimony    
  > FOREX-Dollar bulls pull in horns ahead of Bernanke speech    
  > Gold slips tracking higher dollar ahead of Bernanke testimony    
  > Copper near one-month high ahead of Bernanke testimony        
  > Brent slips below $108 ahead of Fed Chairman's testimony    
    The miner said expansion of its iron ore operations in Australia was running
ahead of schedule, as the company posted a robust 9 percent rise in ore output
to a record annual 187 million tonnes. 
    The French cosmetics giant posted a 5.2 percent rise in second-quarter
like-for-like sales, slightly below forecasts, and pointed to improved trading
at its underperforming hair salon products unit. 
    The French telecom group is considering the sale of its Dominican Republic
business in a deal that could fetch up to 900 million euros, as it exits
non-core markets to pay down debt, seven people with knowledge of the situation
    Morocco's state investment vehicle Caisse de Depot et de Gestion may team up
with Dubai-based Etisalat in the latter's planned purchase of a
majority stake in Maroc Telecom, CDG's chief executive said.
    The hotel group expects satisfactory business in most key markets during the
summer after the Paris Airshow and other trade fairs boosted hotel demand in
France, Germany and the UK in the second quarter. 
    * Swiss drugmaker Novartis hiked its outlook for the full-year as
delays to a generic competitor for its blockbuster blood pressure pill Diovan
softened the blow of patent losses.
    * A federal court in New York ruled that Mylan Inc's generic
application for a multiple sclerosis drug has not infringed some of Teva
Pharmaceutical Industries'  patents, Mylan said. Israel-based Teva is
also suing Momenta Pharmaceuticals, Novartis AG's Sandoz unit and
India-based Natco Pharmaceuticals for infringing patents.
    For more, click on: 
    The world's biggest testing and inspection company SGS reported a
disappointing first-half net profit as it took a charge for restructuring and
continued to be hit by weak demand for its minerals exploration services.
    For more, click on:    
    German policymakers may look at selling the state's 17 percent stake in
bailed-out lender Commerzbank after national elections in September,
sources close to the leading political parties said. 
    The European Commission gave provisional backing to France's decision to
block the sale of most new Mercedes models, after Germany allowed Daimler to use
a banned coolant in its cars. 
    Related news    
    The real estate company said its IPO had been completed with full exercise
of the greenshoe option. 
    Related news 
    The Swedish posted a second-quarter profit that beat expectations as core
income topped forecasts and loan losses came in lower than expected. Operating
profits reached 4.72 billion crowns ($714 million), topping a mean forecast for
4.45 billion seen in a Reuters poll of analysts and compared with 4.41 billion
in the year-earlier period.
    For more on the company, double click 

    The Nordic region's biggest bank reported in-line second-quarter profits and
said it expected an approval of its advanced internal models for its corporate
loan book to be delayed a few months. 
    Operating profit for the period was 1.05 billion euros ($1.38 billion)
compared with a mean forecast for 1.04 billion seen in a Reuters poll and a
year-ago 1.08 billion. 
    For more on the company, double click 
    Telecom operator TeliaSonera reported second-quarter profit roughly in line
with expectations as cost cuts and growth in emerging markets offset competitive
pressure in the Nordic region. 
    The company's earnings before interest, tax, depreciation and amortisation
(EBITDA), excluding non-recurring items, were 8.9 billion Swedish crowns ($1.35
billion) versus the average forecast of 8.8 billion in a Reuters poll and last
year's 9.0 billion.
    For more on the company, double click

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