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European shares edge up; Goldman Sachs awaited

European shares edge up; Goldman Sachs awaited
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First Published: Tue, Jul 20 2010. 03 19 PM IST
Updated: Tue, Jul 20 2010. 03 19 PM IST
London: European shares edged up on Tuesday, supported by gains in miners as metals prices firmed, but sentiment was fragile ahead of results from US investment bank Goldman Sachs.
By 0910 GMT the pan-European FTSEurofirst 300 index was up 0.1% at 1,007.25 points.
If it clings onto those slim gains it will end four straight sessions of losses that mounted to 3.7% as disappointing economic data revived worries over the pace of economic recovery.
Results from Goldman Sachs, due before Wall Street opens, will help investors gauge the health of the banking sector after peers Bank of America, JPMorgan and Citigroup beat analysts’ earnings forecasts last week but struggled to maintain overall revenues.
“The market will look for guidance (from companies) for Q3 and to see how that is going and will be sensitive to any expressions of confidence or the lack of it,” said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.
Helping support the index, heavyweight mining shares were higher as commodity prices rose on the back of a weak dollar. Miners Eurasian Natural Resources, BHP Billiton and Rio Tinto rose 1.7 to 2.3%.
Banks were mixed ahead of the results from Goldman Sachs, with HSBC and BNP Paribas both up around 0.3%, while Societe Generale and Barclays shed 0.3 and 1% respectively.
British telecoms company Cable & Wireless Worldwide plunged 15.4% after it warned that trading had been hit by a significant slowdown in UK public sector business following the government’s emergency budget in June.
Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 was up 0.1 to 0.2%.
A mixed bag of earnings led to sharp moves in individual stocks.
Shares in Europe’s largest biotech Actelion rose 5.3% when it confirmed its 2010 outlook after stronger-than-expected sales of its key heart and lung drug Tracleer, even though its quarterly profit lagged forecasts.
Nokia rose 3.5% after a report in the Wall Street Journal suggested the company might soon replace its chief executive.
Swiss watch makers Swatch Group and Richemont rose 2.1 and 2.4%, respectively, after Swiss watch exports posted a better-than-expected 35% rise in June.
On the downside, Handelsbanken lost 3.1% as the Swedish lender’s quarterly earnings lagged forecasts after higher funding costs more than offset a reduction in bad loans.
A raft of US companies are due to report on Tuesday, including Bank of New York Mellon, asset manager State Street and consumer and healthcare products company Johnson & Johnson . Technology bellwethers Apple and Yahoo will report earnings after the closing bell.
US stocks rose overnight, but shares in tech firms International Business Machines and Texas Instruments fell after the market close as their revenue growth disappointed markets.
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First Published: Tue, Jul 20 2010. 03 19 PM IST
More Topics: Markets | Europe | Stocks | Goldman Sachs | Financials |