Tuesday, December 9, 2008

European Stock-Index Futures Decline; BHP, Nokia May Be Active

European stock futures dropped, indicating the Dow Jones Stoxx 600 Index may trim yesterday’s 6.7 percent rally, as lower metal prices damped the outlook for earnings at mining companies.

BHP Billiton Ltd. might lead a decline in copper producers as the base metal slid in Asia. Nokia Oyj and STMicroelectronics NV may be active after Texas Instruments Inc., the second-biggest U.S. chipmaker, cut its forecasts. Q-Cells SE will probably fall as the world’s largest maker of solar cells reduced its profit targets for this year and 2009.

Futures on the Euro Stoxx 50 Index, a benchmark for the euro region, decreased 16, or 0.7 percent, to 2,435 at 7:49 a.m. in London. The U.K.’s FTSE 100 Index is set to open 38 points lower, according to CMC Markets.

Stocks yesterday rallied around the world, sending the Dow Jones Industrial Average to a one-month high, as President-elect Barack Obama pledged to boost the economy with the biggest public-works spending package since the 1950s. Asian stocks rose for a third day today.

“After yesterday’s bumper gains a degree of profit taking is likely,” said London-based Matt Buckland, a dealer at CMC Markets. Economic reports still “emphasize just how deep the recession that we’re facing is. Traders have every reason to be looking cautious.”

A Royal Institution of Chartered Surveyors report today showed U.K. home sales fell to the lowest level since at least 1978. Separate figures may show German investor confidence dropped to a near record low in December as the financial crisis pushed Europe’s largest economy deeper into recession.

Annual Loss

Europe’s Stoxx 600 Index has slumped 44 percent this year as governments worldwide introduce measures to buttress their economies from the worst financial crisis since the Great Depression. More than $31 trillion has been erased from the value of global equities, while debt losses and writedowns at the world’s largest lenders and insurers approach $1 trillion.

BHP, the world’s largest mining company, and Xstrata Plc, the fourth-biggest copper producer, may lead mining shares lower. The metal resumed its retreat following the biggest gain in a month yesterday. London Metal Exchange copper slid as much as 5 percent to $3,151 a metric ton today.

Lonmin Plc might also fall after Credit Suisse Group AG downgraded the platinum producer to “underperform” from “outperform,” saying the outlook for the industry would remain challenging.

Technology Shares

Nokia, the world’s largest mobile-phone company, may be active. Texas Instruments, which gets more than 15 percent of revenue from Nokia, cut its sales and profit forecasts as the economic slump curbed demand for electronics.

STMicroelectronics, Europe’s biggest semiconductor maker, and ASML Holding NV, the region’s largest maker of semiconductor equipment, may also move.

Samsung Electronics Co., the world’s biggest maker of memory chips, liquid-crystal displays and televisions, said the global recession is wiping out profits at those businesses this quarter.

National Semiconductor Corp., the maker of chips for the five largest mobile-phone makers, forecast third-quarter sales that trailed analysts’ estimates.

Q-Cells will probably decline. The solar company said net income for 2008 will be 185 million euros ($237 million) as weakening demand caused customers to postpone deliveries. That’s down from an earlier prediction of 215 million euros. Sales will amount to 1.225 billion euros, lower than a previous forecast of 1.35 billion euros.

Source : http://www.bloomberg.com/