Stocks on the fall in the UK today. Compiled by Dow Jones Newswires Markets Desk, markets.eu@dowjones.com0929 GMT Central and Eastern European markets show muted reaction to Greece's referendum outcome, which suggests that "contagion to the region has, so far at least, been relatively well contained," says William Jackson, senior emerging markets economist at Capital Economics. Central European equity markets are mostly down by 0.5%-1.0%, currencies are broadly flat against the euro and local currency bond yields are up a few basis points. For most CEE countries, the real risk lies in their large ties with the wider eurozone. "Accordingly, what matters is the extent to which the Greek crisis triggers stress in financial markets in Western Europe. In this regard, today's market moves provide an early sign that contagion may be limited," Mr. Jackson says. (emese.bartha@wsj.com; @EmeseBartha)
0926 GMT European energy companies are feeling the pain wrought by the Greek vote against creditors' demands, with oil & gas stocks down, in keeping with the broader losses in the market. Portugal's Galp Energia and Spain's Repsol are hit hardest, losing 2.6% and 1.7%, although the latter is also hurt by an equity rating downgrade. Bigger companies such as Anglo-Dutch giant Royal Dutch Shell, Italy's Eni and France's Total are off a little more than 1%. The companies generally don't have much exposure to Greece, which isn't an oil producing country and gets a large part of its crude supplies from Russia. So far, with local demand low, Greek refiners have been able to pay crude suppliers with earnings from refined exports. (Michael.Amon@wsj.com)
0912 GMT [Dow Jones]--Numis Securities lowers its target price on Hunting to 478p from 500p, and cuts its earnings forecasts after the energy services group's trading update last week. On Thursday Hunting reported a 76% fall in profit from operations in the first five months of the year, and said it expects year-on-year profit from operations to be between 50% and 75% lower than 2014. Numis has downgraded 2015 and 2016 earnings estimates by 34% and 20% respectively. Shares down 0.6% at 540.55p. (ian.walker@wsj.com; @IanWalk40289749)
0911 GMT Morgan Stanley upgrades BAE Systems to overweight from equalweight with an unchanged target price of 570p. The brokerage is surprised at BAE's recent underperformance (down 11%, versus the FTSE 100 down 7% and down 3% for the sector) given its defensive attractions amid the uncertain macro backdrop. Says program and defence budget concerns look overdone, creating a valuation anomaly and over 25% upside to the target price. BAE shares are down 0.1% at 452p. (gary.stride@wsj.com)
0902 GMT Most stock markets in the Persian Gulf trade slightly lower Monday, as investors adopt some caution amid uncertainty about Greece and weaker oil prices. Also, the outcome from the Iran nuclear talks could trigger another round of brisk buying and selling in the regional markets, says Al Masah Capital. "So while June was mundane in terms of trading activity, July may be something quite different," it adds. Saudi stocks trade down 0.4% at 9122.96, Doha's market slips 0.3% to 11,972.62 and Dubai's main index is 0.2% lower at 4062.27. Abu Dhabi's market is up 0.5% at 4759.01. (nikhil.lohade@wsj.com; Twitter: @lohadenikhil)
0846 GMT Ferrari chairman Sergio Marchionne has returned to one of his favorite themes--talking up the valuation the luxury sports car manufacturer will garner at its IPO later this year. However some analysts still aren't convinced. At the top end of the multiples suggested by Mr. Marchionne, which Evercore ISI says seem "rich", Ferrari would be worth EUR8.7 billion, below the minimum EUR10 billion put forth by the executive a few days ago. Mr. Marchionne, who is also chief executive of Fiat Chrysler Automobiles, first argued for a Ferrari valuation most analysts considered too generous more than a year ago. Evercore estimates Ferrari will have gross operating profit this year of about EUR729 million. FCA shares are down 3.1% at EUR12.41.(eric.sylvers@wsj.com, @EricSylvers)
0831 GMT Greece's Oxi (No) vote should have a limited impact for euro area banks outside Greece, even if Greece were not to fulfill all payment obligations, says Michael Kemmer, managing director of the German BdB commercial banks association. German banks have limited investments in Greece, have already written down the bulk of debt outstanding in recent years and have prepared early for a potential Greek default on payments, he says. Greek banks owe German banks EUR243M, Greek companies and private individuals owe them EUR3.63B, and Greece's public sector owes Germany's KfW development bank some EUR15.21B from the first bailout tranche, according to the latest data available, the BdB says. Deutsche Bank shares down 2.7%, Commerzbank 2.2% lower. (ulrike.dauer@wsj.com)
0816 GMT Rolls-Royce Holdings has now issued a series of profit warnings over the past two years. So what assurances do investors have that today's would be the last? David Smith, chief financial officer for the British engine maker said the company has gone through a thorough assessment of its 10-year plan and it has "confidence" in its current market view. "I do believe it does create a base on which we can build barring further adverse developments," Mr. Smith said. Still, "a thorough operational review of the business" is still planned by new chief executive Warren East. Shares slide 9.2% to 778p. (robert.wall@wsj.com)
0812 GMT Banca Monte dei Paschi di Siena shares were temporarily suspended in Milan due to large losses. Investors are dumping Italian banking stocks which are normally those most sensitive to macroeconomic shocks. These stocks are now the most penalized in Milan, shedding roughly between 2% and 7%. Monte dei Paschi shares were suspended while 7.4% lower than Friday's closing price. Ftse Mib is down 2.8% at 21,880.74, among the worst performing indexes in Europe. (giovanni.legorano@wsj.com; @glegorano)
0805 GMT In a continuation of recent trends, Spanish stocks started off Monday down over 2% after a 'no' victory in the Greek referendum Sunday and then recovered a touch. IBEX-35 last seen down 1.6% at 10,605.10. Traders say news of the resignation of Greece's Finance Minister Varoufakis may be helping to contain losses as it should ease negotiations in coming days, although many in Madrid think a Greek exit from the eurozone would not be so bad for the Spanish economy and markets. Link Securities reckons a new deal between Athens and its creditors is "almost impossible." Banks are having a rough day, with Banco de Sabadell down 2.5%, Banco Santander 2.4% lower and BBVA also off 2.4%. (anna.perez@dowjones.com, david.roman@wsj.com)
0803 GMT [Dow Jones]--Shares of Europa Oil & Gas fall 17% to 6.5p after announcing plans to raise up to GBP3.4 million via a placing and open offer at 6p a share which will be used to financing its near-term work program. The placing price is a 24% discount to the closing share price of 7.88p Friday. The AIM listed exploration and production company focused on Europe has placed 20 million new ordinary shares, conditionally placed an extra 2.63 million new ordinary shares and issued a further 34.15 million new ordinary shares pursuant to a one-for-six open offer to shareholders. (ian.walker@wsj.com; @IanWalk40289749)
0750 GMT French banks are trading lower after Greeks overwhelmingly vote against their international creditors' conditions for further bailout. Over the past four years, French banks have drastically cut back their exposure to Greece--selling their Greek bonds and cutting credit lines. However, French banks could still be impacted by a Greek exit from the eurozone through their shipping loans portfolio. BNP Paribas trades 2.6% lower, Credit Agricole is down 1.9% down and Societe Generale off by 2.5%.(noemie.bisserbe@wsj.com)
(END) Dow Jones Newswires
July 06, 2015 05:29 ET (09:29 GMT)
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