LONDON -- European equity markets have seen a full turnaround this morning, buoyed at the open by potentially positive news from China, then turning around before the U.S. open to sink well into negative territory. The drop came as U.S. futures declined due to some weaker-than-expected earnings results, while the telecommunications sectors in Europe saw sharp selling pressure following mildly negative news from some large names.
Benchmark indexes started on a much more upbeat note this morning after data overnight showed Chinese inflation had slowed for a fourth consecutive month, promoting hopes that the Asian giant will begin to do more to stimulate its economy. These gains were soon pared, however, with the Spanish IBEX
As always, the following price moves are based on this morning's European trading.
Deutsche Telekom (NASDAQOTH: DTEGY.PK) is one of the worst telecom performers today, down 2.2% after starting the day in a much more buoyant fashion. This came despite today's report of better-than-expected profits owing to lower handset subsidies in the U.S., with focus instead turning to news that it had lost more customers at its U.S. unit than was expected by most analysts.
At the same time, France Telecom
Elsewhere, Commerzbank (NASDAQOTH: CRZBY.PK) is down 4.7% in Frankfurt after it said profit in the second half will fall significantly because of slowing economic growth and higher loan-loss provisions. The company set aside 616 million euros for doubtful loans in the quarter and called its 1.7 billion euro loan-loss provision for 2012 increasingly ambitious.
The company reported first-half net income of 644 million euros thanks to the large loan writeoff, at the same time saying it is less likely to pay a dividend as it continues its efforts to reduce costs. CFO Stephen Engels also said Commerzbank does not expect the economic and market environment to stabilize in the second half of this year.
On a more positive note, Finnish phone maker Nokia
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