* STOXX 600, blue chips flat
* Steelmakers boost basic resources
* Nordic stocks in focus as Gjensidige, Skanska fall
* SEB leads banks after Q2 beat
* Earnings on horizon as U.S. banks set to report
(Adds quotes and detail, updates prices)
By Kit Rees
LONDON, July 14 (Reuters) – European shares were poised for
their best week in more than two months as investors piled back
into equities on signs that the world’s major central banks
would likely not tighten monetary policy as quickly as some had
The move on indexes on Friday was more muted as investors
hunkered down ahead of earnings reports from major U.S. banks
including JPMorgan and Citigroup later in the day.
The pan-European STOXX 600 index was flat in
percentage terms by 0852 GMT while euro zone bluechips
were little changed.
“In Europe, we’re still not dealing with any higher interest
rates, which should be benefiting the U.S. (banks) slightly in
terms of net interest margin,” Mike van Dulken, head of research
at Accendo Markets, said.
“That said we’ve still got the supportive QE helping, but
yields are still low, which is not great for the banks.”
Accendo Markets’ van Dulken added that Federal Reserve Chair
Janet Yellen had been very non-committal in her comments about
both interest rates and the balance sheet.
Firmer metals prices underpinned gains on mining stocks.
Miners were led higher by steel firms Outokumpu
, ArcelorMittal, and Tenaris which
rose after U.S. President Donald Trump said that he was
considering quotas and tariffs on Chinese steel dumping.
Analysts at Barclays said that they remained positive on the
European mining sector, which has gained just 4 percent so far
this year after rallying more than 60 percent in 2016.
“Chinese rates are falling, demand indicators across the
economy appear healthy, industry capex discipline is holding,
M&A is generally off the agenda, and resulting strong cashflows
are being utilised for balance sheet reconstruction and
distributions to shareholders,” Barclays analysts said in a
While a rise in bond yields has hit rate-sensitive sectors
such as utilities, banking stocks have instead
benefited and the sector was roughly flat as Swedish lender SEB
jumped around 2 percent after its second-quarter
profit topped forecasts.
Other Nordic stocks were also in focus as Norwegian insurer
Gjensidige slumped 6.5 percent to the bottom of the
STOXX 600 after its second quarter results came in below
It was joined by Swedish construction group Skanksa
, which dropped nearly 5 percent after it warned that
its second-quarter profit would be hit by project writedowns in
the U.S. and Britain.
European earnings get underway in earnest only later this
month. Overall, analyst are calling for about 9 percent
year-on-year earnings growth for top European firms, compared to
about 8 percent for the U.S., according to Thomson Reuters
(Reporting by Kit Rees, Editing by Vikram Subhedar and Toby