european market clues-FTSE 100 index down 0.7 percent

European stock markets diverged Tuesday, with London hit by disappointing corporate news, while investors looked to US earnings.

In late morning trade, London’s benchmark FTSE 100 index was down 0.7 percent compared with Monday’s close, as Frankfurt added 0.2 percent and Paris flattened.

London’s biggest loser was publishing giant Pearson, whose shares slumped 6.2 percent to 648 pence on the group’s cautious shareholder dividend plans.


The announcement was made alongside news that the company had agreed to sell 22 percent of Penguin Random House to joint venture partner Bertelsmann of Germany for $1.0 billion (877 million euros).

The second biggest loser on the FTSE 100 was British retail giant Marks and Spencer, whose stock slid 3.9 percent to 325.70 pence on poor sales during its first quarter.

“The woes of Marks and Spencer as well as education publisher Pearson have dragged on the FTSE today as management of both companies struggle to convince investors that their respective turnaround plans will work,” CMC Markets analyst Michael Hewson told AFP.

“M&S sales disappointed in the first quarter… though the tough environment for the retail sector in general also is not helping.”

Elsewhere Tuesday, most Asian stock markets built on the previous day’s rally.

Dealers remain upbeat after Friday’s surprisingly strong US jobs data that analysts said has put the Federal Reserve on course for at least one more interest rate hike this year, boosting the dollar.

Eyes will now turn to Fed boss Janet Yellen’s congressional testimony this week for a better handle on the bank’s plans for rates, as well as winding down its other stimulus put in place during the financial crisis.

– US corporate results –

Another key catalyst for business this week will be the beginning of the US corporate report season, with big-name firms including JP Morgan, PepsiCo and Citigroup set to deliver updates.

“The market is now starting to analyse second-quarter earnings for more indications that global economic growth is progressing as expected,” FX Pro traders said in a note to clients.

“As global equities close in on reaching record highs, political uncertainty has taken a back seat to expected global economic growth.”

Oil prices meanwhile edged higher Tuesday for a second day after last week’s losses, supported by an expected drop in US stockpiles.

– Key figures around 1030 GMT –

London – FTSE 100: DOWN 0.7 percent at 7,316.60 points

Frankfurt – DAX 30: UP 0.2 percent at 12,467

Paris – CAC 40: FLAT at 5,165.10

EURO STOXX 50: DOWN 0.3 percent at 3,120.60

Tokyo – Nikkei 225: UP 0.6 percent at 20,195.48 (close)

Hong Kong – Hang Seng: UP 1.5 percent at 25,877.64 (close)

Shanghai – Composite: DOWN 0.3 percent at 3,203.04 (close)

New York – DOW: FLAT at 21,408.52 (close)

Euro/dollar: DOWN at $1.1395 from $1.1399 at 2100 GMT on Monday

Pound/dollar: UP at $1.2910 from $1.2881

Dollar/yen: UP at 114.33 yen from 114.04 yen

Oil – Brent North Sea: DOWN 31 cents at $45.57 per barrel

Oil – West Texas Intermediate: DOWN 30 cents at $44.10

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