Friday, 16 August 2013

European Stocks Fluctuate Before U.S. Housing Reports

By Sofia Horta e Costa - Aug 16, 2013 4:01 AM PT
European stocks fluctuated, after the Stoxx Europe 600 Index dropped the most in more than five weeks yesterday, as investors awaited reports on the U.S. housing market. U.S. futures rose, while Asian shares fell.
Telekom Austria AG slid 2.7 percent following a report that the company may sell new shares. ASML Holding NV declined 1.3 percent after Applied Materials Inc., a U.S. supplier of chipmaking equipment, said sales won’t increase in the fourth quarter. A.P. Moeller-Maersk A/S jumped the most in 20 months after predicting that its Maersk Line unit will post better full-year profit than last year’s $461 million as it cuts costs.
The Stoxx 600 slipped 0.2 percent to 304.82 at 11:59 a.m. in London, after earlier swinging between gains and losses at least six times. The gauge has declined 0.4 percent this week as better-than-forecast U.S. jobless claims fueled speculation that the Federal Reserve will soon taper its bond-buying program. Standard & Poor’s 500 Index futures added 0.2 percent today, while the MSCI Asia Pacific Index retreated 0.3 percent.
“It does feel like the U.S. economy is gaining a bit of momentum,” said William Hobbs, the London-based head of equity strategy at Barclays Plc’s wealth-management unit. “Investors have been trying to decide whether good news is bad news. There must be a lot of institutional money sitting on some very fat profits year-to-date, and a lot of them may feel it is prudent to trim those profits as tapering becomes a reality. What might freak the markets out now is the pace of tapering.”
The Stoxx 600 rose to a 12-week high on Aug. 14 as a report showed the euro area’s economyreturned to growth in the three months through June after six consecutive quarters of contraction. The equity benchmark has rallied 11 percent since reaching a low on June 24 as central banks signaled interest rates will remain low for an extended period.

Housing Market

In the U.S., a Commerce Department report at 8:30 a.m. in Washington will show housing starts rose to a 900,000 annualized rate in July, economists surveyed by Bloomberg predicted. In a sign construction activity will increase, building permits may climb to a 945,000 rate from 918,000 in June.
A separate release at 9:55 a.m. New York time will probably show a gauge of consumer sentiment in the world’s largest economy rose to a six-year high in August. The preliminary reading of the Thomson Reuters/University of Michigan index climbed to 85.2 from 85.1 in July, according to the median estimate of economists surveyed by Bloomberg.
The volume of shares changing hands in companies listed on the Stoxx 600 was 2 percent lower than the average of the past 100 days, according to data compiled by Bloomberg.

Telekom Austria

Telekom Austria (TKA) slid 2.7 percent to 5.57 euros after Format reported that the company may sell 1 billion euros ($1.3 billion) of new equity. Shareholder America Movil SAB wants to use the capital increase to fund investments, according to the magazine, which didn’t say how it got the information. Telekom Austria spokesman Peter Schiefer said the company does not need to sell new shares.
ASML, Europe’s largest semiconductor-equipment supplier, lost 1.3 percent to 68.41 euros. Applied Materials forecast fiscal fourth-quarter revenue that missed analysts’ estimates as customers delayed upgrades to their factories.
STMicroelectronics NV slipped 2.6 percent to 6.31 euros in Milan trading.
Royal Bank of Scotland Group Plc (RBS) declined 1.4 percent to 336 pence after Investec Plc cut its rating on the state-owned lender to sell from hold. The brokerage said that its forecast for no improvement in RBS’s return on equity this year means that its valuation will probably not rise further. The bank trades at 18.1 times projected earnings, compared with 11.4 times forHSBC Holdings Plc (HSBA) and 8.7 times for Barclays Plc.

Maersk Rallies

Maersk’s B-shares surged 7 percent to 47,880 kroner. The group will probably post full-year net income of $3.5 billion, excluding impairment losses and divestment gains, it said in a statementtoday. That compares with the company’s previous forecast of $2.9 billion.
Opera Software ASA jumped 8.3 percent to 52 kroner after predicting earnings before interest and taxes of $58 million to $64 million for the full year. The Norwegian maker of Internet browsers had forecast $52 million to $62 million. The company still posted earnings per share for the second quarter that missed analysts’ estimates.
Fresnillo Plc rallied 5.6 percent to 1,188 pence and Randgold Resources Ltd. added 4.1 percent to 5,090 pence after gold surged to its highest price in almost two months after the close of European trading yesterday. A gauge of mining stocks posted the biggest gain of 19 industry groups on the Stoxx 600, and is headed for its sixth consecutive week of gains.
To contact the reporter on this story: Sofia Horta e Costa in London at
To contact the editor responsible for this story: Andrew Rummer at