EU stock fu­tures drop be­fore US jobs data

The Pak Banker - - Front Page -


Euro­pean stock fu­tures de­clined as in­vestors awaited the last U.S. monthly jobs re­port be­fore Pres­i­den­tial elec­tions next week. U.S. in­dex fu­tures were lit­tle changed, while Asian shares rose.

HSBC Hold­ings Plc and Deutsche Bank AG may move as they are among lenders that will be re­quired by global reg­u­la­tors to in­crease cap­i­tal. Royal Bank of Scot­land Group Plc (RBS) may drop af­ter the UK's big­gest gov­ern­men­towned lender re­ported thirdquar­ter loss that ex­ceeded an­a­lyst es­ti­mates. Al­ca­tel-Lu­cent SA may move af­ter post­ing a loss nar­rower than an­a­lyst pro­jec­tions.

Fu­tures on the Euro Stoxx 50 In­dex ex­pir­ing in De­cem­ber fell 0.3 per­cent to 2,523 at 7:33 a.m. in Lon­don. Fu­tures on the UK's FTSE 100 In­dex (UKX) slipped 0.2 per­cent. The bench­mark Stoxx Europe 600 In­dex ral­lied the most in two weeks yes­ter­day af­ter U.S. eco­nomic re­ports, in­clud­ing the payrolls data from ADP Re­search In­sti­tute, beat es­ti­mates. Stan­dard & Poor's 500 In­dex fu­tures lost 0.1 per­cent, while the MSCI Asia Pa­cific In­dex added 0.8 per­cent.

"The im­proved ADP num­ber has raised ex­pec­ta­tions that to­day's non-farms num­ber will be equally as good," said Michael Hew­son, a mar­ket an­a­lyst at CMC Mar­kets Plc in Lon­don. "To­day's re­lease of the lat­est payrolls re­port for Oc­to­ber could well be the piece of data that makes a dif­fer­ence as to who man­ages to get their hands on the keys to the White House in next week's Pres­i­den­tial elec­tion."

The Stoxx 600 has climbed 1.2 per­cent so far this week as data from China and the U.S. in­di­cated the global eco­nomic re­cov­ery is on track and as com­pa­nies re­ported bet­ter-than- fore­cast earn­ings. The gauge has ral­lied 17 per­cent from this year's low on June 4 low.

In the US, La­bor Depart­ment fig­ures to be re­leased at 8:30 a.m. in Wash­ing­ton may show un­em­ploy­ment rose in Oc­to­ber from a three-year low. The job­less rate climbed to 7.9 per­cent from 7.8 per­cent in Septem­ber, economists fore­cast in a Bloomberg sur­vey. Payrolls will gain 125,000, from 114,000 a month ear­lier, economists said in a sep­a­rate sur­vey. The re­port may also show pri­vate payrolls, which ex­clude gov­ern­ment jobs, climbed by 123,000 in Oc­to­ber af­ter ris­ing 104,000 the prior month, ac­cord­ing to a Bloomberg sur­vey. It will be the last of the monthly jobs re­ports be­fore Barack Obama and Mitt Rom­ney face off in the Nov. 6 polls.

Of the 164 com­pa­nies in the Stoxx 600 that have re­ported earn­ings so far this sea­son, 88 have ex­ceeded es­ti­mates, while 74 have missed them, data com­piled by Bloomberg show.

HSBC and Deutsche Bank may move af­ter an updated list pub­lished yes­ter­day by the Fi­nan­cial Sta­bil­ity Board showed that the lenders are among firms that will be asked to set aside a cap­i­tal sur­charge of 2.5 per­cent.

RBS may be ac­tive af­ter the lender said third-quar­ter net loss was 1.38 bil­lion pounds ($2.22 bil­lion) af­ter set­ting aside 400 mil­lion pounds more to com­pen­sate clients wrongly sold loan in­sur­ance. An­a­lysts had fore­cast a loss of 276 mil­lion pounds. The net loss in­cludes a 1.5 bil­lion-pound ac­count­ing loss on the fair value of RBS's debt.

Al­ca­tel-Lu­cent may be ac­tive af­ter the French phonee­quip­ment maker said thirdquar­ter net loss was 146 mil­lion eu­ros ($188 mil­lion), beat­ing the av­er­age an­a­lyst es­ti­mate call­ing for a loss of 149.1 mil­lion eu­ros. Sales de­clined 2.8 per­cent to 3.6 bil­lion eu­ros, com­pared with the 3.55 bil­lion- euro av­er­age es­ti­mate.

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