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Friday July 16, 05:03
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Bourses move higher
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European equities were a little higher in early trade on Friday as the recently-battered tech sectors mounted a modest rebound, but with some major stock indicators hovering close to year lows, caution looked likely to remain.
In early exchanges, the FTSE Eurotop 300 was up 0.1 per cent to 970.59, while Frankfurt’s Xetra Dax added 0.4 per cent to 3,863.15. In Paris, the CAC-40 was 0.2 per cent higher at 3,617.94 and London’s FTSE 100 climbed 0.1 per cent to 4,345.8.
In New York overnight, stocks drifted lower following disappointing earnings and guidance from two Dow components, Pfizer and Citigroup. Solid results from Apple helped cap the losses, and after-hours earnings from tech-heavyweight IBM, which beat expectations, could give some support to European technology stocks.
European technology stocks were among the top gainers in early trade. After two sessions of losses following weak guidance from US-listed Intel, chip stocks rebounded and Infineon of Germany gained 1.7 per cent to €9.68, while STMicroelectronics added 1.2 per cent to €16.33. ASML, the Dutch maker of chip manufacturing equipment, was up 1.8 per cent to €11.98.
But Nokia, which lost nearly 12 per cent on Thursday after reporting weak second-quarter sales and warning on third-quarter earnings, lost a further 1.6 per cent to €9.85 on Friday as the stock downgrades and price-target cuts began to roll in.
Deutsche Bank retained its "buy" recommendation on Nokia, but cut its price target, saying it expected current margin weakness to remain in the short term, but believed it would reverse this trend once an improved product portfolio was in place. Also cutting their price targets on Nokia were JP Morgan and Morgan Stanley.
Citigroup downgraded the stock to "hold" from "buy", while Goldman Sachs lowered its rating to "underperform" from "in line", saying structural risks outweighed restructuring benefits.
Snecma, the French manufacturer of aircraft engines, was up 1 per cent to €15.85 after it reported an 8.1 per cent rise in first-half sales, keeping it on target for full-year revenue goals.
Pfizer’s sales warning in the US on Thursday hit pharmaceutical stocks in Europe. Sanofi-Synthelabo fell 1.2 per cent to €53.35, while Schering lost 0.7 per cent to €47.27. AstraZeneca was down 0.6 per cent to £23.16, and GlaxoSmithKline shed 1.1 per cent to £10.49.
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