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European Stocks Seen Rising Ahead Of Fed Policy Update

4/25/2012 2:21 AM ET

European shares are seen opening flat to slightly higher on Wednesday, as investors keep an eye on the Federal Reserve's policy announcement later in the global day. The Fed is widely expected to leave interest rates at near-zero levels, but traders will pay close attention to any comments on "Operation Twist," the central bank's bond-buying stimulus program scheduled to end in June.

Asian markets are swinging between gains and losses as a deepening political crisis in the Netherlands offset positive consumer confidence data out of South Korea and Apple's forecast-beating first-quarter earnings. The Dutch crisis intensified as the top opposition parties rejected the prime minister's budget cuts needed to meet EU budget targets.

The Japanese yen fell versus most of its major peers on speculation the Bank of Japan will announce further asset-buying measures next week. Commodities are little changed, while the euro was struck in a range near a three-week high against the dollar.

In domestic corporate news, Swiss engineering firm ABB reported a 5 percent rise in first-quarter profit and said it was looking for profitable growth in 2012.

Credit Suisse reported a 96 percent drop in net profit for the first quarter, mainly hurt by fair value losses of CHF 1.55 billion before taxes resulting from a significant tightening in own credit.

Computer systems and solutions provider Kontron AG reported that its first-quarter earnings before interest and tax plunged 43 percent to 4.2 million euros due to the unfavorable revenue and margin mix.

Dutch chip gear maker ASM International posted a decline in net earnings for the first quarter, reflecting lower sales both in front-end and bank-end segments.

SAP AG, the world's biggest maker of business software, reiterated its forecast for full-year 2012 after reporting a 10 percent rise in first-quarter profit.

German industrial conglomerate Siemens AG cut its full-year profit forecast after reporting lower second-quarter profit on account of a major charge related to project delays at its wind-power transmission business.

Novartis said that the European Commission has approved Signifor (pasireotide) for the treatment of adult patients with Cushing's disease for whom surgery is not an option or for whom surgery has failed.

Swedish appliance company Electrolux AB posted higher first-quarter income of SEK 559 million versus SEK 457 million last year, with earnings per share rising to SEK 1.96 from SEK 1.60 a year ago.

European stocks rebounded from the previous session's sell-off on Tuesday, with banks among the top performers, as a series of decent bond auctions in Spain, the Netherlands and Italy eased concerns over Europe's debt crisis. Shares pared some early gains in the afternoon following the release of U.S. consumer confidence and new home sales reports.

The Euro Stoxx 50 index of eurozone bluechip stocks climbed 1.8 percent and the Stoxx Europe 50 index, which includes some major U.K. companies, finished 0.8 percent higher, while Switzerland's SMI, the U.K.'s FTSE 100, the German DAX and France's CAC 40 rose between 0.2 percent and 2.3 percent.

On Wall Street, stocks turned in a lackluster performance overnight, as a mixed batch of economic data on consumer confidence and new home sales coupled with caution ahead of the Federal Reserve's monetary policy announcement as well as Chairmen Ben Bernanke's accompanying press conference on Wednesday prompted investors to remain on the sidelines. Weakness in Apple's shares sent the tech-heavy Nasdaq down 0.3 percent, while the Dow rose 0.6 percent and the S&P 500 gained 0.4 percent.

by RTT Staff Writer

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