News Column

European Stocks Seen Lower As EU & US Slap Russia With Fresh Sanctions

July 29, 2014

VIENNA (Alliance News) - European stocks look set to open lower on Wednesday after the US and EU imposed tougher economic sanctions against Russia targeting broad sectors of its economy. Meanwhile, violence continues in Gaza, with an estimated 60 Palestinians killed after Israeli forces targeted Islamist militants at dozens of sites across the coastal enclave.

The Asian markets are turning in a mixed performance as investors digested regional earnings and looked ahead to US reports on private sector employment and second-quarter GDP due tonight for further clues on the health of the world's largest economy.

The International Monetary Fund on Tuesday warned that high interest rates around the world and emerging market slowdown could reduce global growth by two percentage points in the next five years. "Recovery and normalization of monetary policies in key advanced economies will have global spillovers," the IMF said in its report.

The focus now turns to the Federal Reserve's latest policy announcement due tonight, with investors looking for indications regarding the outlook for interest rates. The US dollar hovers near a six-month high against a basket of currencies amid expectations the US central bank will announce another USD10 billion reduction in the pace of its asset purchases.

On the earnings front, Twitter shares soared in after-hours trading Tuesday after the social media company reported much better earnings and continued user growth. American Express Co. reported a 9% rise in quarterly profit, in line with Wall Street estimates.

Closer home, the European Commission is scheduled to release its business sentiment report for the Eurozone at 5 am ET, with the headline index estimated to edge down to 101.9 in July from 102 in June. At the same time, the business climate index is expected to come in at 0.2 after posting a score of 0.22 in June.

German Federal Statistical Office DESTATIS is due to release its preliminary estimate for German consumer prices at 8 am ET. Consumer prices are expected to rise 0.8% year-over-year in July after rising 1% in June.

In corporate news, Swiss cement giant Holcim said its net income for the half year slid 13.5% to 657 million Swiss francs, in the absence of a year-ago gain of a reduction of participation in Cement Australia.

Specialty chemicals maker Clariant AG reported second-quarter net income from continuing operations of 83 million Swiss francs, up from 71 million francs in the previous year.

HeidelbergCement AG reported Group share second-quarter profit of 233 million euros, down from 368 million euros in the year-ago period.

Osram Licht AG confirmed its outlook for 2014 after posting higher net income of 44 million euros for the third quarter.

Kontron AG's Q2 earnings before interest and tax from continuing operations jumped to 2.0 million euros from 0.2 million euros last year.

French aerospace giant Airbus Group reported a 31% increase in second-quarter 2014 net income to 696 million euros, compared with 531 million euros last year.

The European markets rose on Tuesday despite the announcement of more broad economic sanctions on Russia's finance, defense and energy sectors over the conflict in Ukraine. The German DAX rose 0.6%, France's CAC 40 advanced half a percent and the UK'sFTSE 100 added 0.3%.

US stocks finished lower on Tuesday, as investors digested news of fresh sanctions against Russia, mostly positive earnings reports and mixed economic reports on consumer confidence and home prices. The Dow shed 0.4%, the tech-heavy Nasdaq slipped 0.1% and the S&P 500 dropped half a percent.

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Source: Alliance News

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