European Stocks Turn Positive, ABB Shines
Enviado: 11/7/2003 10:36Reuters
European Stocks Turn Positive, ABB Shines
Friday July 11, 5:15 am ET
By Marie Maitre
LONDON (Reuters) - European shares reversed losses on Friday morning, with ABB leading market climbers after a U.S. court approved its asbestos settlement, but weak tech stocks like Nokia capped equity gains.
Swiss engineering firm ABB topped blue-chip gainers, climbing six percent as investors welcomed a court decision, which paves the way for the sale of its asbestos-tainted oil, gas and petrochemicals unit -- valued at over $1 billion -- in a crucial step to help it trim its crushing debt load.
Carrefour, the world's biggest supermarket group after Wal-Mart, was another bright spot, up one percent after it posted slightly better than expected first-half sales.
By 0845 GMT, the pan-European FTSE Eurotop 300 index was 0.8 percent higher at 861 points -- heading for a one-percent rise on the week despite a three-session losing run. The narrower DJ Euro Stoxx 50 index gained 0.7 percent at 2,459.
Earnings continue to dictate market sentiment, with investors torn between fears that a weak dollar may have hurt European exporters' revenues more brutally than expected and hopes that further restructuring had helped many companies continue to improve their bottom line.
"Earnings are key for the markets, particularly in the United States, and I think we'll get fewer nasty surprises than expected, which should help markets resume their uptrend," said Jacques-Antoine Bretteil, head of International Capital Gestion in Paris.
"In the meantime, markets won't be up to a great deal as they are still pausing for breath, digesting the past three months' rally."
Many strategists said that unfavorable currency effects on European earnings had been mostly priced in by markets but some of them still did not rule out nasty surprises in the case of companies that badly hedged their currency exposure.
Around Europe, Paris, London and Frankfurt all erased opening losses to climb roughly 0.7 percent each. The Swiss Market Index was 0.3 percent higher.
TECHS, AUTOS HAND BACK GAINS
Technology issues weighed again, tracking a 1.8-percent overnight slide in the Nasdaq as jitters ahead of next week's heavy load of earnings results from sector mammoths such as telecom equipment maker Ericsson and consumer electronics giant Philips sparked fears that a recent rally may have pushed the sector too high.
Finnish telecom equipment maker Nokia, which reports on Thursday, was off one percent after a bull run boosted its shares by 10 percent. French peer Alcatel was down 1.2 percent.
Investors also continued to lock in profits on some car stocks after a recent rally as investment bank JP Morgan downgraded the European sector to "neutral" from "overweight" on valuation grounds.
The bank said a second half recovery had been largely priced in just as western European new car registrations figures showed a 2.9-percent monthly increase in June, in yet another sign that demand for cars is picking up.
But French carmaker Renault erased earlier losses to drive one percent higher after its new registrations for June shot up 12.9 percent and those at 44.4-percent owned Japanese unit Nissan surged 18 percent.
On the upside, Dutch insurer Aegon gained three percent after announcing it would shed 10 to 15 percent of the 3,000 jobs at its Dutch unit in the next three years as part of a revamp of its organization.
Like other insurers it is seeking to cut expenses in order to cope better with revenues that have been put under pressure by the weak economy.
European Stocks Turn Positive, ABB Shines
Friday July 11, 5:15 am ET
By Marie Maitre
LONDON (Reuters) - European shares reversed losses on Friday morning, with ABB leading market climbers after a U.S. court approved its asbestos settlement, but weak tech stocks like Nokia capped equity gains.
Swiss engineering firm ABB topped blue-chip gainers, climbing six percent as investors welcomed a court decision, which paves the way for the sale of its asbestos-tainted oil, gas and petrochemicals unit -- valued at over $1 billion -- in a crucial step to help it trim its crushing debt load.
Carrefour, the world's biggest supermarket group after Wal-Mart, was another bright spot, up one percent after it posted slightly better than expected first-half sales.
By 0845 GMT, the pan-European FTSE Eurotop 300 index was 0.8 percent higher at 861 points -- heading for a one-percent rise on the week despite a three-session losing run. The narrower DJ Euro Stoxx 50 index gained 0.7 percent at 2,459.
Earnings continue to dictate market sentiment, with investors torn between fears that a weak dollar may have hurt European exporters' revenues more brutally than expected and hopes that further restructuring had helped many companies continue to improve their bottom line.
"Earnings are key for the markets, particularly in the United States, and I think we'll get fewer nasty surprises than expected, which should help markets resume their uptrend," said Jacques-Antoine Bretteil, head of International Capital Gestion in Paris.
"In the meantime, markets won't be up to a great deal as they are still pausing for breath, digesting the past three months' rally."
Many strategists said that unfavorable currency effects on European earnings had been mostly priced in by markets but some of them still did not rule out nasty surprises in the case of companies that badly hedged their currency exposure.
Around Europe, Paris, London and Frankfurt all erased opening losses to climb roughly 0.7 percent each. The Swiss Market Index was 0.3 percent higher.
TECHS, AUTOS HAND BACK GAINS
Technology issues weighed again, tracking a 1.8-percent overnight slide in the Nasdaq as jitters ahead of next week's heavy load of earnings results from sector mammoths such as telecom equipment maker Ericsson and consumer electronics giant Philips sparked fears that a recent rally may have pushed the sector too high.
Finnish telecom equipment maker Nokia, which reports on Thursday, was off one percent after a bull run boosted its shares by 10 percent. French peer Alcatel was down 1.2 percent.
Investors also continued to lock in profits on some car stocks after a recent rally as investment bank JP Morgan downgraded the European sector to "neutral" from "overweight" on valuation grounds.
The bank said a second half recovery had been largely priced in just as western European new car registrations figures showed a 2.9-percent monthly increase in June, in yet another sign that demand for cars is picking up.
But French carmaker Renault erased earlier losses to drive one percent higher after its new registrations for June shot up 12.9 percent and those at 44.4-percent owned Japanese unit Nissan surged 18 percent.
On the upside, Dutch insurer Aegon gained three percent after announcing it would shed 10 to 15 percent of the 3,000 jobs at its Dutch unit in the next three years as part of a revamp of its organization.
Like other insurers it is seeking to cut expenses in order to cope better with revenues that have been put under pressure by the weak economy.