Getinge slumps as U.S. worries push down European shares

Reuters

* FTSEurofirst down 0.5 pct, Euro STOXX 50 falls 0.4 pct

* Getinge slumps after profit warning

* Most investors still expect eventual U.S. budget/debt deal

* Equity pullback is buying opportunity -Bordier CEO

* MB Capital backs running "short" positions

By Sudip Kar-Gupta

LONDON, Oct 8 (Reuters) - European shares fell on Tuesday,with medical technology group Getinge slumping aftera profit warning, as the United States' budget stalemate weighedon stock markets.

Even though most investors still expected an eventual dealto be reached on the U.S. budget and its debt ceiling, many wereprepared to "short" the market, or bet on the market falling,until the deadline for resolving the standoff nears.

The pan-European FTSEurofirst 300 index fell forthe fourth time in five sessions, declining by 0.5 percent to1,234.72 points. The euro zone's blue-chip Euro STOXX 50 index also fell 0.4 percent to 2,912.53 points.

Getinge was the worst performer on the FTSEurofirst,dropping 9.4 percent after it became the latest European companyto warn on profits, following the likes of consumer goods groupUnilever and cruise operator Carnival

The profit warnings have weighed on stock markets thismonth, with analysts having trimmed 2013 earnings estimates forthe pan-European STOXX 600 index by 3 percent since thestart of the third quarter. ()

Markets have also come back down from multi-year highs afterthe U.S. government had to partially shut down this month due todisagreement among politicians over the country's budget.

The U.S. budget standoff has led to concerns about the $16.7trillion U.S. debt ceiling, which Treasury Secretary Jack Lewhas said the government will hit no later than Oct. 17.

The FTSEurofirst 300 remains up 9 percent since the start of2013 while the Euro STOXX 50 is up 10 percent, but the U.Sstalemate has pushed those indexes off a 5-year high for theFTSEurofirst 300 and a 2-year high on the Euro STOXX 50 reachedin late September.

"There's the opportunity to be running the market 'short',and as we approach the October deadline and if there's profitson the table, I'd be looking to bank them," said MB Capitaltrading director Marcus Bullus.

Nevertheless, most investors still expect a deal to bereached eventually, and U.S. President Barack Obama said hewould accept a short-term increase in the nation's borrowingauthority to avoid a default.

Michel Juvet, chief investment officer at Swiss bankBordier, said he would use the stock market pullback caused bythe U.S. situation to buy up stocks.

"I see it as a buying opportunity," he said.

View Comments (0)