October 24, 2013
(Adds companies, futures prices)
LONDON, Oct 24 (Reuters) - European shares were expected to bounce back towards five-year highs in early trading on Thursday, cheered by a survey showing a pick-up in manufacturing activity in China.
Miners were likely to track gains in metals prices after the flash Markit/HSBC Purchasing Managers Index (PMI) for China, the world's top metals consumer, hit a seven-month high. It stood at 50.9 in October, above September's final reading of 50.2.
"The manufacturing sector represents the driving element behind the country's success and thus the ability of this sector to perform and grow is key to both regional and global growth," Alpari analyst Joshua Mahony said in a note.
China shares cut losses and traded flat after the manufacturing data, while European stock index futures rose. Futures for Germany's DAX , UK's FTSE 100 , France's CAC and for the Euro STOXX 50 were 0.5 to 0.7 percent higher by 0642 GMT.
The Euro STOXX 50 cash index fell 0.9 percent to 3,017.16 points in the previous session, but the market's technical outlook remained positive.
"The index is working on a conclusion of it�s long-term pattern and a massive resistance zone around 3,050-3,080 is in focus," Sophia Wurm, technical analyst at Commerzbank said.
"In case the index overcomes this resistance in a sustained manner, we would see a long-term technical improvement and a new investment buy signal. I would expect it to show a relative strength compared to other major indices such as the S&P 500 , the FTSE 100 and the DAX ."
The pan-European FTSEurofirst 300 index fell 0.6 percent to 1,279.99 points on Wednesday, retreating from five-year highs, as plans for a new, tougher stress test for euro zone banks and some weak earnings numbers hurt sentiment.
After positive China manufacturing data, investors' focus will shift to German flash manufacturing PMI at 0728 GMT, which is expected to rise to 51.5 in October from 51.1 in the previous month. The euro zone's PMI numbers, due at 0758 GMT, are seen up to 51.4 this month from 51.1.
Across the Atlantic, the market will keep a close eye on U.S. first-time claims for jobless benefits for the week ended Oct. 19 at 1230 GMT, with economists forecasting a total of 340,000 new filings, against 358,000 in the previous week. U.S. flash Manufacturing PMI for October, due at 1258 GMT, is seen at 52.5, slightly down from 52.8 in the final September report.
Thursday's busy earnings calendar offered mixed messages.
Daimler forecast full-year underlying profit to drop about 8 percent, roughly in line with market expectations, after results beat forecasts for the three months through September.
Major U.S. companies reporting results later in the day included Microsoft , Xerox Corp. , Ford Motor Company , Amazon.com Inc and Coca-Cola .
According to Thomson Reuters StarMine data, 71 percent of the S&P 500 companies that have reported results so far have met or beaten third-quarter forecasts. In Europe, 53 percent companies on the STOXX Europe 600 index have met or beaten predictions, while the rest have missed forecasts. --------------------------------------------------------------------------------
> Asian shares slip, China looks set to tighten liquidity
> Wall Street ends down as Caterpillar falls, Boeing rallies
> Nikkei falls to 2-wk low on China concerns, disappointing U.S. earnings
> U.S. yields slip to 3-month lows as Fed tapering seen delayed
> Dollar off 2-week low vs yen, Aussie up as China worries ebb
> Gold edges up towards 4-week high, focus on U.S. data
> Copper rises from near 1-wk low on brighter China factory data
> Brent edges up, positive Chinese data offsets US stocks build
The industrial group said net profit rose 10 percent in the third quarter, even as orders fell as the awarding of large orders remained slow. For more, click on:
U.S. drugs distributor McKesson made an $8.3 billion takeover bid for German peer Celesio to boost its purchasing power with global drug makers.
The euro zone's biggest bank on Thursday posted net profit of 3.3 billion euros ($4.5 billion) for the nine months to September, up 77 percent from a year ago when it had to put aside bigger provisions against loan losses.
The consumer goods company reported a 3.2 percent rise in third-quarter sales, in line with guidance it gave last month.
The Italian carmaker is likely to miss sales targets in Brazil this year and next, according to a person familiar with the matter and a document seen by Reuters, increasing the chance of a 2013 profit warning already predicted by some analysts.
The bank said it would restructure its interest rate trading activities following a third-quarter slide in revenue at its investment bank. Overall net profit rose to 454 million Swiss francs, missing by far analyst estimates, which averaged 705 million francs.
Mobile telecom gear maker Ericsson posted third-quarter operating profit below expectations and said sales were under pressure.
Spanish lender Bankinter said net profit for the first nine months of the year had more than doubled to 156 million euros ($215 million), beating analysts expectations.
Machinery and tool maker Sandvik said a sharp fall in demand from a retrenching mining industry was showing signs of levelling out after pushing the Swedish company to a bigger than expected fall in third-quarter earnings.
The French spirits group Pernod announced first-quarter underlying sales below market expectations, with revenue hit by persistent weakness in China.
The world's largest maker of ophthalmic lenses cut its full-year growth target again, citing a slower-than-expected recovery in North America and delays in finalising some acquisitions.
The oil major said it is investing $850 million to develop a deep water natural gas field off the southern coast of Argentina with German firm Wintershall and local company Pan American Energy.
The French aerospace group posted 9.7 percent higher third-quarter revenue led by a continued surge in civil aerospace markets, and reaffirmed targets for sales and core earnings for the year.
The world's largest advertising company posted third quarter organic revenue well ahead of expectations, as it stole a march on its two biggest rivals which are locked in the process of merging.
The French waste and water company said nine-month core profit rose 6.2 percent like-for-like and stuck to its full-year earnings targets.
Swedish banking group SEB reported a bigger-than-expected rise in third-quarter operating profits as it beat forecasts on most income lines and credit quality improved.
Airbus is poised to review its A380 superjumbo after a slump in orders and has not ruled out shaving output of the world's largest jetliner while waiting for the economy to come to its rescue.
The French software maker revised its full-year forecasts following a profit warning last week, saying it expects 2013 revenue to rise about 5 to 6 percent at constant exchange rates and the operating margin to remain stable at about 31 to 32 percent.
(Reporting by Atul Prakash; editing by Patrick Graham)
Keywords: MARKETS EUROPE FACTORS