Monday, July 13, 2009

European Shares Hit By Earning Uncertainty

. Monday, July 13, 2009

By stockOzone team

Uncertainty over the corporate earnings season continued to weigh on sentiment as European stocks hit 11-week lows with resource stocks tracking commodity prices lower.

The FTSE Eurofirst 300 slipped back for the seventh session out of eight, losing 0.2 per cent to 812.64 by mid-morning after earlier reaching an 11-week low of 805.93. Germany’s Xetra Dax edged up 0.1 per cent to 4,583.23 while France’s CAC 40 lost 0.1 per cent to 2,981.92.

Worries over how Xstrata would fund its merger proposal for Anglo American dragged miners lower.

But carmakers were higher as Porsche gained 8.9 per cent to €46.12 on German media reports of an offer by Qatar to buy a €7bn stake. Volkswagen also gained 3.7 per cent to €52.68.

Daimler advanced 4 per cent to €25.20 after the luxury carmaker sold part of its 10 per cent stake in US electric car maker Tesla Motors to Aabar Investments, which is controlled by the emirate of Abu Dhabi.

Aabar acquired 9.1 per cent of Daimler in March to become its largest shareholder and the latest move signals an increase in its co-operation to develop alternative car powering systems.

Also among the big gainers was Philips as the Dutch conglomerate reported second-quarter operating profit that beat analyst expectations and expressed confidence that its cost-cutting programme would leave it in good stead for the second half. Its shares gained 4.9 per cent to €13.58.

UBS downgraded K+S to “sell” from “neutral”, resulting in Europe’s largest producer of potash used in fertilisers falling 5.2 per cent to €35.91.

The banking sector was mixed, with DnB Nor losing a further 2.5 per cent to NKr43.10 after its announcement of disappointing second-quarter results on Friday.

But UBS was buoyed in early trade as it stepped back from the brink of a damaging court battle with the US government over the Swiss bank’s refusal to reveal the names of thousands of its offshore customers to the US Internal Revenue Service. It initially rose 1.2 per cent before paring gains to 0.9 per cent at SFr12.75.

Anheuser-Busch Inbev fell 1.7 per cent to €26.47 after news that Japan’s Kirin Holdings and Suntory Holdings were in merger talks in a move that could create a formidable competitor to the world’s leading brewer. (1€ = $1.39616)

Disclosure: Author does not own any of the stocks discussed here.

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