STOCKS NEWS EUROPE-European shares fall 1 pct as jitters remain


STOCKS NEWS Reuters Results diary

Stocks on the move [HOT-RTRS] Real-time Equity News [E] [WEU/EQUITY]

09:36GMT 30May2006 - European shares fall 1 pct as jitters remain


European shares extend losses as fears of rising interest rates continue to weigh despite some upbeat corporate news from the likes of mobile network giant Vodafone .

Mining stocks such as Anglo American dip despite firming commodity prices, while oil holding above $71 a barrel saps general sentiment.

Europe's FTSEurofirst 300 index falls 1 percent to 1,309.85 points. The benchmark has now fallen 7 percent from a near five-year high of 1,407.52 hit on May 11 despite a substantial rebound last Thursday and Friday.

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09:32GMT 30May2006 - Switch into telecoms from auto stocks -S&P


Investors should switch out of automobile stocks and into the telecoms sector for lower volatility and better returns, a note from Standard & Poor's Equity Research says.

"Auto sector volatility is in the top quartile during the recent minicrash, while the industry group has underperformed the market. Given its outperformance year to date and the uncertainties over the outlook for the dollar we are recommending investors make a strategic switch out of the industry group," strategist Clive McDonnell writes in a research note.

"From a tactical and portfolio strategy perspective a switch into telecoms makes sense given its lower volatility and higher post-crash returns."

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07:45GMT 30May2006-JP Morgan sees equity markets falling further


Equity markets will continue to suffer due to slowing economic growth in the United States, declining corporate profitability, higher inflation and the risk of excessively tight U.S. monetary policy, JP Morgan says in a note.

"Despite the recent pull-back in the market (MSCI World declined 6 percent between May 9-25), we believe there is still downside from current levels," JP Morgan says.

European equity valuations look cheap but multiples are likely to contract this year, the U.S. investment bank adds.

"We see weakening earnings momentum, acceleration in core inflation and euro strengthening putting pressure on equities and would therefore advise investors to be cautious in buying equities on the back of cheap multiples alone."

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07:36GMT 30May2006-European stocks take a dip; Vodafone in spotlight


European stocks kick off trading on a negative note, despite mobile phone giant Vodafone dominating attention as it beat earnings forecasts and unveiled plans to return an extra 3 billion pounds to investors.

Steel stocks rally, led by Corus on fresh sector consolidation hopes, while airports operator BAA leaps after it shuns an improved bid by Spain's Grupo Ferrovial .

By 0717 GMT, the pan-European FTSEurofirst index of 300 leading shares is down 0.2 percent at 1,319.3 points, as UK investors return after Monday's public holiday.

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06:43GMT 30May2006 - BAA shares set to race higher after Ferrovial ups bid


Shares in airports group BAA are poised to open as much as 60 pence, or 7 percent, higher after Spanish construction firm Grupo Ferrovial raised its bid to 9.73 billion pounds ($18.1 billion), dealers say.

The British airports group continued to reject a deal.

Shares in BAA closed at 820-1/2 pence on Friday.

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06:35GMT 30May2006 - Vodafone seen higher as dividend cheered


Shares in mobile phone giant Vodafone are seen opening around 5 percent higher after the company said it planned to return an extra 3 billion pounds to shareholders and posted a strong total dividend, dealers say.

They forecast the shares will open between 5 and 6 pence higher in early trade, having closed at 119-3/4p on Friday.

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06:35GMT 30May2006-M.Stanley recommends bonds over risky assets


Global excess liquidity has started to shrink as a result of tighter monetary policy and there is now less liquidity available to chase asset prices higher, Morgan Stanley says in a research note.

"A correction seems like a logical response," the investment bank says, pointing out that the difference between narrow money supply growth and GDP growth in the United States, the euro area, Japan, Canada and Britain turned significantly negative in the first quarter.

"Times of contracting excess liquidity have usually been times of distress for asset markets," Morgan Stanley says.

"Only once global GDP growth slows significantly...and central banks change course, excess liquidity will improve and risky assets can start to rally again," it says, recommending government bonds and cash over risky assets.

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06:18GMT 30May2006-European shares set for lacklustre start


European stocks are set for a soft start as interest rate worries gnaw at investors and commodity prices remain firm, while the dollar comes under pressure as London and U.S. markets open after a public holiday.

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06:15GMT 30May2006-Vodafone year earnings top Tuesday's diary


UK mobile network giant Vodafone is among a handful of firms reporting earnings on Tuesday while the economic newsflow is thin as UK and U.S. markets return to work after Monday's public holidays.

(Double click in the square brackets for details on what analysts are expecting, where available)

European companies reporting on Tuesday:

Vodafone prelim year [ID:nL25318967]


Domestic & General prelim year


Hellenic Telecommunications Q1 [ID:nL29718737]

Pandatel Q1

Economic news:

Eurozone April private loans (0800)

Eurozone interim money supply (0800)

U.S. May consumer confidence (1400)

Japanese Apr unemployment (2330 Mon)

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