Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

European stocks flat; eyes best quarter since 1999

Published 06/30/2009, 07:55 AM
Updated 06/30/2009, 08:00 AM
UK100
-
BARC
-
HEIN
-
CARR
-
SASY
-
ULVR
-

* FTSEurofirst 300 flat after hitting one-week high

* Carrefour sags on disappointment at analyst day

* For up-to-the-minute market news, click on

By Blaise Robinson

PARIS, June 30 (Reuters) - European stocks were flat at midday on Tuesday, as a drop in retail and food stocks such as Carrefour eclipsed gains in pharma shares, led by Sanofi-Aventis's rebound from last week's selloff.

Shares in Carrefour, the world's second-largest retailer, dropped 2 percent on disappointment the company had not, so far, unveiled a big cost-cutting programme at an analyst day in Paris.

Other retailers and food and drinks groups lost ground, with Tesco down 1.1 percent, Heineken down 2.1 percent and Unilever down 1.4 percent.

At 1137 GMT, the FTSEurofirst 300 index of top European shares was down 0.03 percent at 859.34 points.

The index, which is up 3.3 percent this year, has surged 33 percent since plummeting to a record low in early March, but the spring rally has stalled since early May, as mixed macroeconomic data dampened hopes of speedy economic recovery.

"Equities will remain stuck in the range that we've seen over the past few weeks, with high volatility and low volumes, as people are waiting for more visibility," said Victor Peiro Perez, head of strategy at Caja Madrid Bolsa.

"That should go on at least until we get the second-quarter results and outlook from companies."

The FTSEurofirst 300 is on track to record a 17 percent gain on the quarter -- its best quarterly performance since 1999. But Europe's benchmark index is still down 47 percent from a multi-year high reached in mid-2007.

But while the spring rally lost steam over the past few weeks, investors continued to pour money into equities.

A Reuters survey on Tuesday showed fund managers in continental Europe pulled capital out of cash in June and boosted stock holdings to their highest since August.

The monthly survey of 14 investment houses in the region, released on Tuesday, showed equity holdings rose to 47.1 percent of their portfolios this month from 45.9 percent in May.

EARNINGS SEASON KEY

A number of analysts say the real test for the equity rally will be the second-quarter earnings season. The results were expected to be relatively bad, but investors will look for any signs of a turnaround in profit.

"One of the factors driving renewed investor pessimism is to do with earnings, where the view is that expectations have moved too far too fast, setting the scene for a disappointment," said JPMorgan strategist Mislav Matejka in a note.

"There were some high profile negative pre-announcements over the past few weeks, and it is highly likely there will be more, but in contrast to the popular perception, the pre-announcement season has been rather benign so far."

On Tuesday, investors were digesting grim economic data that showed euro zone bank lending has stalled and Japanese unemployment at its highest level for six years, adding to worries over the outlook for the global economy.

Pharmaceutical shares gained ground, with Sanofi-Aventis up 2.6 percent, paring some of its recent hefty losses sparked by worries over one of the company's main drugs, and GlaxoSmithKline up 1.5 percent.

Banks were also on the upside, with Barclays up 2.1 percent, UBS up 1.6 percent and UniCredit up 1 percent.

So far this year, the DJ STOXX energy index is up 9 percent, and the banking index is up 21 percent, while the health care index is down 4.6 percent.

Around Europe, Britain's FTSE 100 index was flat, Germany's DAX index was down 0.1 percent, and France's CAC 40 was down 0.1 percent. (Editing by Dan Lalor)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.