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Banks, commodities drag European stocks lower
Wed, 8th Apr 2009 12:03
By Joanne Frearson
LONDON, April 8 (Reuters) - European shares were lower at
midday on Wednesday as fears over corporate earnings knocked
commodities and banking stocks, putting Europe on track for its
fourth straight day of losses.
By 1033 GMT, the FTSEurofirst 300 index of top
European companies was down 0.9 percent at 754.08 points. The
pan-European index is still up more than 16 percent from the
lifetime low it hit on March 9.
'The market is taking a reflective pause ... Obviously Alcoa was a massive disapointment and was worse than expected.
We expected a first quarterly net loss of $350 million and we
got $497 million,' said David Buik, partner at BGC Partners.
'This is barometer that perhaps first quarter earnings in
the U.S. are not going to be good. After the fantastic run we
have had it is probably folly to think we can crack on from the
levels we have obtained over the last few weeks. It is a pause
for reflection today.'
U.S. aluminium group Alcoa on Tuesday reported a
second consecutive quarterly loss, as metal prices and the auto
industry slumped and global demand fell in the economic
downturn.
Miners slipped with Anglo American, Antofagasta , BHP Billiton, Eurasian Natural Resources
Corporation, Rio Tinto and Xstrata down
between 0.5 percent and 5 percent.
Oil producers fell after crude dropped 2.4 percent,
adding to Tuesday's 3.7 percent loss on falls for equities and
after weekly data showed U.S. crude inventories up far more than
expected.
BG Group, BP, Royal Dutch Shell and
Total were between 1 percent and 4 percent lower.
IRISH BANKS SLUMP
Banks were heavy weight losers on the index. Bank of Ireland and Allied Irish Banks fell 31.6 percent and
33.6 percent, respectively, after the government said it would
create a company to take over up to 90 billion euros ($119
billion) of the sector's risky commercial property loans.
Ratings agency Moody's Investors Service also downgraded its
ratings on 12 Irish banks, saying it expected more loan losses.
HSBC, Banco Santander and Deutsche Bank were between 1 percent and 2.2 percent lower.
Pernod Picard lost 6.4 percent after the French
drinks group unveiled the sale of its Wild Turkey bourbon brand
to Italy's Campari and said it planned a 1 billion
euros rights issue to help cut debt.
On the upside, investors turned to defensive sectors like
drugmakers and tobacco for safety. GlaxoSmithKline was
up 1 percent, while British American Tobacco and
Imperial Tobacco gained 1.3 percent and 2.4 percent,
respectively.
'We are starting to see investors retreat from riskier
trades and
positioning themselves within safe haven assets as we
break for the Bank Holiday and delve into the U.S. earnings
season,' said Joshua Raymond, market strategist at City Index.
Compass Group was 2.5 percent higher after Morgan
Stanley raised its rating for the contract caterer to
'overweight' from 'equal-weight' and increased its target price
to 420 pence from 360 pence.
Across Europe, the FTSE 100 index was down 1
percent, Germany's DAX slipped 0.9 percent and France's
CAC 40 was 1.1 percent lower.
(Editing by Karen Foster)
Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2
(joanne.frearson@thomsonreuters.com; +44 207 542 2773, Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, April 8 (Reuters) - European shares were lower at
midday on Wednesday as fears over corporate earnings knocked
commodities and banking stocks, putting Europe on track for its
fourth straight day of losses.
By 1033 GMT, the FTSEurofirst 300 index of top
European companies was down 0.9 percent at 754.08 points. The
pan-European index is still up more than 16 percent from the
lifetime low it hit on March 9.
'The market is taking a reflective pause ... Obviously Alcoa was a massive disapointment and was worse than expected.
We expected a first quarterly net loss of $350 million and we
got $497 million,' said David Buik, partner at BGC Partners.
'This is barometer that perhaps first quarter earnings in
the U.S. are not going to be good. After the fantastic run we
have had it is probably folly to think we can crack on from the
levels we have obtained over the last few weeks. It is a pause
for reflection today.'
U.S. aluminium group Alcoa on Tuesday reported a
second consecutive quarterly loss, as metal prices and the auto
industry slumped and global demand fell in the economic
downturn.
Miners slipped with Anglo American, Antofagasta , BHP Billiton, Eurasian Natural Resources
Corporation, Rio Tinto and Xstrata down
between 0.5 percent and 5 percent.
Oil producers fell after crude dropped 2.4 percent,
adding to Tuesday's 3.7 percent loss on falls for equities and
after weekly data showed U.S. crude inventories up far more than
expected.
BG Group, BP, Royal Dutch Shell and
Total were between 1 percent and 4 percent lower.
IRISH BANKS SLUMP
Banks were heavy weight losers on the index. Bank of Ireland and Allied Irish Banks fell 31.6 percent and
33.6 percent, respectively, after the government said it would
create a company to take over up to 90 billion euros ($119
billion) of the sector's risky commercial property loans.
Ratings agency Moody's Investors Service also downgraded its
ratings on 12 Irish banks, saying it expected more loan losses.
HSBC, Banco Santander and Deutsche Bank were between 1 percent and 2.2 percent lower.
Pernod Picard lost 6.4 percent after the French
drinks group unveiled the sale of its Wild Turkey bourbon brand
to Italy's Campari and said it planned a 1 billion
euros rights issue to help cut debt.
On the upside, investors turned to defensive sectors like
drugmakers and tobacco for safety. GlaxoSmithKline was
up 1 percent, while British American Tobacco and
Imperial Tobacco gained 1.3 percent and 2.4 percent,
respectively.
'We are starting to see investors retreat from riskier
trades and
break for the Bank Holiday and delve into the U.S. earnings
season,' said Joshua Raymond, market strategist at City Index.
Compass Group was 2.5 percent higher after Morgan
Stanley raised its rating for the contract caterer to
'overweight' from 'equal-weight' and increased its target price
to 420 pence from 360 pence.
Across Europe, the FTSE 100 index was down 1
percent, Germany's DAX slipped 0.9 percent and France's
CAC 40 was 1.1 percent lower.
(Editing by Karen Foster)
Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2
(joanne.frearson@thomsonreuters.com; +44 207 542 2773, Reuters Messaging:joanne.frearson.thomsonreuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2009. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
