European stocks may open narrowly mixed on Friday as investors adopt a cautious approach on the eve of U.S. budget talks beginning today. The Middle-East geo-political tensions and renewed sovereign concerns about Greece and Spain may also keep investor sentiment subdued ahead of the weekend, while rising expectations of additional monetary easing by the Bank of Japan could help limit the downside to some extent.
Technology stocks could be in focus after computer maker Dell posted a 47 percent fall in its third-quarter profit and forecast a fourth straight quarter of declining sales, hurt by deteriorating performance in the personal computer industry and the challenging global macro-economic environment.
Asian markets are turning in a mixed performance reflecting lingering concerns about the looming fiscal cliff as well as worries about the flare-up of violence in the Gaza Strip. However, Japan's Nikkei index is climbing 2.2 percent, extending the previous session's 2 percent rally on expectations of further BOJ easing as Prime Minister Yoshihiko Noda decided to officially dissolve the House of Representatives at the plenary session during the routine Cabinet meeting. Noda will hold a press conference in the evening to explain the dissolution, the Xinhua news agency reported.
Meanwhile, the Japanese government today downgraded its economic assessment for the fourth straight month after official figures showed the gross domestic product contracted in the September quarter. Elsewhere, Singapore cut its growth forecast this year to around 1.5 percent, the lower end of the target range, reflecting weak external demand.
In economic releases, Eurostat is slated to release foreign trade data for September later in the session, with economists expecting Eurozone trade surplus to rise to EUR 10 billion from EUR 6.6 billion in August.
Across the Atlantic, the Federal Reserve is due to release its report on industrial production for October before the start of trading, although the data may be viewed as old news in light of Hurricane Sandy. President Barack Obama and Congressional leaders will begin budget negotiations today amid growing fears the United States may fall back into recession if a deal is not reached to avoid the fiscal cliff.
In corporate news, U.K. consumer and healthcare company Reckitt Benckiser Group Plc announced that it would commence a tender offer to acquire all of the outstanding shares of Schiff Nutrition International Inc., a provider of branded vitamins, nutrition supplements and nutrition bars in the United States and elsewhere, for $42.00 per share in cash valuing Schiff at about $1.4 billion.
Global miner BP Plc said it would pay about $4.5 billion to the U.S. government to settle criminal and securities claims over the 2010 Deepwater Horizon accident in the Gulf of Mexico that claimed 11 lives and led to a massive oil spill.
Drug maker GlaxoSmithKline Plc has agreed to pay several states in the U.S. a total of $90 million to settle claims it used illegal means to promote its erstwhile block buster diabetes drug Avandia.
European stocks finished to the downside on Thursday, taking cues from Wall Street and weak economic data showing the euro-zone economy slipped into recession despite modest growth reported in both Germany and France. The Euro Stoxx 50 index of eurozone bluechip stocks fell half a percent and the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.9 percent, while around Europe, key benchmark indexes in France, the U.K., Germany and Switzerland fell between half a percent and 1.5 percent.
U.S. stocks extended their recent declines overnight, as Wal-Mart posted disappointing quarterly sales and traders digested a batch of weak economic data on jobless claims and regional manufacturing activity, with readings obscured by major disruptions caused by Hurricane Sandy. The Dow and the tech-heavy Nasdaq slid 0.2 percent and 0.4 percent, respectively, to close at their lowest levels since June, while the S&P 500 edged down 0.2 percent to hit a three-month low.
by RTT Staff Writer
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