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Siemens leads gains for European stock markets
November 8, 2012 / 11:48 AM / in 5 years

Siemens leads gains for European stock markets

* FTSEurofirst 300 up 0.3 pct at 1,102.14 points

* Euro STOXX 50 rises 0.6 pct to 2,494.06 points

* Worries over weak economy and euro zone persists

* Some traders looking to sell shares on back of rebound

By Sudip Kar-Gupta

LONDON, Nov 8 (Reuters) - Reassuring earnings from major companies including Siemens helped European stock markets rebound on Thursday, although gains were seen limited by fresh signs that the region’s economy remains weak.

The FTSEurofirst 300 index edged up by 0.3 percent to 1,102.14 points by around midday, having fallen 1.4 percent during the previous session.

The euro zone’s Euro STOXX 50 index also rose by 0.6 percent to 2,494.06 points.

German engineering conglomerate Siemens added the most points to the FTSEurofirst 300 index, after it reported a smaller-than-expected fall in profits and unveiled planned cost savings of 6 billion euros ($7.7 billion).

“There was a big rout yesterday but we seem to have put a stop to that for the time being,” said Central Markets senior trader Joe Neighbour.

However, Neighbour said he was adopting a cautious approach due to the persistently weak economic backdrop, and would look to book profits by selling shares on signs of rallies.

Neighbour bought a position on Germany’s DAX at 7,240 points on Wednesday but then later sold it at 7,265 points. The DAX was up 0.5 percent at 7,270.44 points.

“I‘m still on the bearish side and I would look to sell into strength,” he said.


Europe’s economic problems were highlighted again on Thursday by data showing that German exports had fallen at their fastest pace since December 2011.

Gekko Global Markets sales trader Anita Paluch cautioned that the economic backdrop remained gloomy, with Spain still under pressure to accept a sovereign bailout while Greece is struggling to meet the terms of its own rescue deal.

“We are having a reality check right now,” she said.

Yet while the FTSEurofirst 300 index has slipped back from a 2012 peak of 1,122.76 points in mid-September, it remains up by some 8 percent since late July.

This was when equity markets rallied after European Central Bank (ECB) head Mario Draghi pledged to do “whatever it takes” to protect the euro from Europe’s sovereign debt crisis.

Reassuring third-quarter results have also supported European equities over the last month.

Reinsurer Swiss Re also beat market forecasts with its third-quarter results, and the company further encouraged investors with the promise of a special dividend.

“We really like Swiss Re and its promise of the special dividend. After such a sharp sell-off in the previous session, the bargain-hunters are coming back in,” said MB Capital trading director Marcus Bullus.

According to Thomson Reuters Starmine data, 56 percent of companies on the STOXX Europe 600 index to have reported third-quarter earnings have met or beaten market expectations for them.

$1 = 0.7840 euros)

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