Miners lead European shares lower on China data
* French stocks fall after Moody’s warningBy Brian GormanLONDON, Oct 18 (Reuters) - European shares fell on Tuesday, with miners among the biggest casualties after top metals consumer China reported lower growth rates, while French stocks underperformed following a warning from Moody’s about the country’s credit rating.Strategists said a summit this weekend, which may result in a plan to tackle the euro zone debt crisis, remained key to market sentiment.Copper prices fell sharply, leading to weaker share prices of miners, after China’s economic expansion slowed in the third quarter to its weakest pace since early 2009 as euro-debt strains and a sluggish U.S. economy took their toll.The STOXX Europe 600 Basic Resources Index fell 3 percent, and has lost more than 32 percent in 2011.”If China slows down, all other bets are off, though the number was only slightly down but it’s clearly had a negative impact on the market,” said Ian King head of international equities at Legal & General, which has 356 billion pounds ($558 billion) under management.At 1116 GMT, the pan-European FTSEurofirst 300 index was down 1 percent at 956.84 points, following a 1 percent fall on Monday after German Finance Minister Wolfgang Schaeuble said it was unrealistic to expect a definitive solution to the euro zone debt crisis at an European Union summit this weekend.The benchmark is down more than 14 percent in 2011 on worries about the euro zone crisis and weak growth but hit a 10-week high prior to Schaeuble’s comments, and is still up more than 12 percent from a September low. L&G’s King said there was scope for the rally to resume on news from the summit.”If politicians say they are committed to doing all they can to bail out their neighbours, that they’re working on a plan to recapitalise the banking sector and longer term we may even consider harmonisation of fiscal policy, you would certainly see a positive reaction in the markets.”France’s CAC 40 , down 1.8 percent, underperformed the broader equity market after Moody’s said on Monday it may slap a negative outlook on the country’s Aaa credit rating in the next three months if the costs for helping to bail out banks and other euro zone members stretch its budget too much.French Finance Minister Francois Baroin tried to play down Moody’s warning saying the country’s rating was solid, but investors were unconvinced and focused instead on his comments on GDP growth. He said a growth target for next year would probably have to be revised down.French banking stocks were lower, with heavyweight BNP Paribas down 6.3 percent. A credit downgrade would have “implications for funding costs”, King said.WEAK SENTIMENTInvestors were given fresh reminders about a weak macroeconomic backdrop in Europe on Tuesday. German investor sentiment fell to its lowest level in nearly three years in October on uncertainty about the euro zone debt crisis.However, some analysts played down the significance of the data.”The ‘real’ economy is moderating but not collapsing whilst investors’ confidence is mainly driven by the unprecedented crisis… (the impact of which) is difficult to predict,” strategists at Newedge Group said in a note.
Miners lead FTSE higher after China data, G20 eyed
* Banks climb as ministers meet in Paris to discuss debt woesBy David BrettLONDON, Oct 14 (Reuters) - Britain’s top share index rebounded on Friday as investors took positions ahead of a G20 finance ministers’ meeting in Paris to discuss Europe’s debt problems and after data from China fanned demand hopes in the region.Traders viewed the softening of inflation as a sign that the Chinese government would be unlikely to tighten its monetary policy further, thereby lifting some worries over the demand outlook from the world’s most voracious consumer of raw materials.”While the Chinese authorities have made it clear that inflation remains the focal point of central bank policy, the prevailing pressures (slowing growth, euro zone debt) suggest the time is drawing near for policy easing either in the form of a reduction in reserve requirement ratios or cuts in interest rates or both,” said Mike Lenhoff, chief strategist at Brewin Dolphin.Miners and integrated oil stocks rose sharply along with base metals and crude oil .Xstrata was the top performer among miners, rising 3.5 percent.One of its major shareholders, Glencore International , lost l 4. percent to become the top FTSE 100 faller, with traders citing talk that Goldman Sachs was undertaking a secondary placing of a $175 million convertible bond for the commodities trader.Banks rose, but their gains were overshadowed by those of the mining sector, after several factors combined to take some of the wind out of their sails.Fitch downgraded Swiss bank UBS and threatened to cut seven other European and U.S. banks, while Standard and Poor’s cut Spain by one notch to AA-minus, although that only brought its rating into line with rival agency Fitch. .The euro zone debt crisis will dominate a summit of G20 finance chiefs and central bank heads in Paris, with a downgrade of Spain’s credit rating highlighting the risk of a much larger economy than Greece coming under threat.French and German officials are trying to put flesh on the bones of a crisis resolution plan in time for an EU summit on Oct. 23.”If investors are expecting a ‘bazooka’-style resolution to the crisis they will be in for a disappointment, and are likely to react strongly if they don’t get one,” said Lothar Mentel, chief investment officer at Octopus Investments, which manages $3.9 billion.Britain’s benchmark index rose 38.92 points, or 0.7 percent to 5,442.30 by 1111 GMT in thin trade, rebounding from a 0.7 percent decline on Thursday.The FTSE continued to struggle to break and hold above the 5,450 level. The index has sold off sharply from this level over the past few months.”In order to tackle the 5,600 level the FTSE will need to close above 5,445 for at least three days,” Sandy Jadeja, chief technical analyst at City Index, said.”The flipside is that the resistance level may push the index lower again as it has done in the past. 5,340 would be the level to keep an eye on.”Among individual stocks, Severn Trent fell 1.2 percent, underperforming a rising FTSE 100 , weighed by an HSBC rating downgrade on the water company to “underweight” from “neutral” on valuation grounds.On the macro economic front no British data is released on Friday, so investors’ economic focus will be across the Atlantic.U.S. stock index futures pointed to a higher open for equities on Wall Street on Friday, ahead of the September U.S. retail sales due at 1230 GMT, with a 0.7 percent monthly rise forecast after being flat in August. U.S. September import and export prices were due at the same time.
Miners lead FTSE higher after China data, G20 eyed
* Banks climb as ministers meet in Paris to discuss debt woesBy David BrettLONDON, Oct 14 (Reuters) - Britain’s top share index rebounded on Friday as investors took positions ahead of a G20 finance ministers’ meeting in Paris to discuss Europe’s debt problems and after data from China fanned demand hopes in the region.Traders viewed the softening of inflation as a sign that the Chinese government would be unlikely to tighten its monetary policy further, thereby lifting some worries over the demand outlook from the world’s most voracious consumer of raw materials.”While the Chinese authorities have made it clear that inflation remains the focal point of central bank policy, the prevailing pressures (slowing growth, euro zone debt) suggest the time is drawing near for policy easing either in the form of a reduction in reserve requirement ratios or cuts in interest rates or both,” said Mike Lenhoff, chief strategist at Brewin Dolphin.Miners and integrated oil stocks rose sharply along with base metals and crude oil .Xstrata was the top performer among miners, rising 3.5 percent.One of its major shareholders, Glencore International , lost l 4. percent to become the top FTSE 100 faller, with traders citing talk that Goldman Sachs was undertaking a secondary placing of a $175 million convertible bond for the commodities trader.Banks rose, but their gains were overshadowed by those of the mining sector, after several factors combined to take some of the wind out of their sails.Fitch downgraded Swiss bank UBS and threatened to cut seven other European and U.S. banks, while Standard and Poor’s cut Spain by one notch to AA-minus, although that only brought its rating into line with rival agency Fitch. .The euro zone debt crisis will dominate a summit of G20 finance chiefs and central bank heads in Paris, with a downgrade of Spain’s credit rating highlighting the risk of a much larger economy than Greece coming under threat.French and German officials are trying to put flesh on the bones of a crisis resolution plan in time for an EU summit on Oct. 23.”If investors are expecting a ‘bazooka’-style resolution to the crisis they will be in for a disappointment, and are likely to react strongly if they don’t get one,” said Lothar Mentel, chief investment officer at Octopus Investments, which manages $3.9 billion.Britain’s benchmark index rose 38.92 points, or 0.7 percent to 5,442.30 by 1111 GMT in thin trade, rebounding from a 0.7 percent decline on Thursday.The FTSE continued to struggle to break and hold above the 5,450 level. The index has sold off sharply from this level over the past few months.”In order to tackle the 5,600 level the FTSE will need to close above 5,445 for at least three days,” Sandy Jadeja, chief technical analyst at City Index, said.”The flipside is that the resistance level may push the index lower again as it has done in the past. 5,340 would be the level to keep an eye on.”Among individual stocks, Severn Trent fell 1.2 percent, underperforming a rising FTSE 100 , weighed by an HSBC rating downgrade on the water company to “underweight” from “neutral” on valuation grounds.On the macro economic front no British data is released on Friday, so investors’ economic focus will be across the Atlantic.U.S. stock index futures pointed to a higher open for equities on Wall Street on Friday, ahead of the September U.S. retail sales due at 1230 GMT, with a 0.7 percent monthly rise forecast after being flat in August. U.S. September import and export prices were due at the same time.
