Europe Factors to Watch-Shares set to reverse Friday's gains

Mon Oct 8, 2012 2:45am EDT

PARIS, Oct 8 (Reuters) - European stocks are set to fall on Monday,
surrendering a big chunk of the previous session's strong gains as the initial
enthusiasm sparked by a surprise drop in the U.S. unemployment rate fades while
worries over the outlook for earnings and the global economy resurface.
    At 0630 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were down 0.6-0.7 percent.
    Wall Street's S&P 500 ended slightly lower on Friday, breaking a
four-session winning run, while the MSCI broad index of Asia Pacific shares
outside Japan was down 0.9 percent on Monday.
    Investors turned cautious ahead of the third-quarter earnings season, set to
start with Alcoa Inc on Tuesday, and after the World Bank cut its
economic growth forecasts for the East Asia and Pacific region, warning about
risks the slowdown in China could get worse and last longer than expected.
 
    "The euphoria after U.S. payrolls was short lived," a Paris-based trader
said. "Things might be slightly improving in the United States, but the main
focus now is China."
    Spain will be in the spotlight again after thousands of people demonstrated
across the country on Sunday to protest against austerity measures, with Spanish
labour unions saying they will call a general strike if the government does not
hold a referendum on unpopular spending cuts. 
    In a meeting on Monday, euro zone finance ministers will formally launch the
euro zone's permanent, 500-billion-euro bailout fund European Stability
Mechanism (ESM), to be used to lend to distressed euro zone sovereigns such as
debt-stricken Spain. 
    The euro zone's blue chip Euro STOXX 50 index surged 3.1 percent
last week, but remains in a short-term downward trend started in mid-September.
    "All in all, buying pressure during every pull-backs is offset by selling
pressure on every rebound," Aurel BGC chartist Gerard Sagnier said.
    "As long as the long-term resistances are not crossed, the risk of
consolidation and correction remains, and the downward potential is around 3 to
5 percent."    
    Japanese financial markets were closed for a public holiday.
--------------------------------------------------------------------------------
 MARKET SNAPSHOT AT 0630 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,460.93  -0.03 %    -0.47
 MSCI ASIA EX-JP                       518.67  -0.82 %    -4.31
 EUR/USD                               1.2976   -0.4 %  -0.0052
 USD/JPY                                78.53  -0.15 %  -0.1200
 10-YR US TSY YLD                       1.743       --     0.00
 10-YR BUND YLD                         1.487       --    -0.04
 SPOT GOLD                          $1,769.39  -0.62 %  -$11.09
 US CRUDE                              $88.81  -1.19 %    -1.07
 
  > GLOBAL MARKETS-Asia shares fall as earnings caution sets in 
  > S&P 500 dips after four days of gains; earnings eyed 
  > FOREX-Dollar dips vs yen, pulls back from 2-week high 
  > Gold dips as upbeat US jobs data saps buying interest 
  > LME copper down as dollar firms after US jobs data 
  > Brent slips below $112 as weak economy offsets supply worries 
    
    COMPANY NEWS:
    
    EADS, BAE 
    Britain will block the proposed $45 billion merger between EADS and BAE
Systems if key "red line" priorities are not met, defence minister Philip
Hammond said on Sunday, just three days before a deadline for detailing the
deal. 
    BAE Systems insists there is "no magic number" for French and German
government shares in a possible merger with EADS, but U.S. experts say anything
over 10 percent could ruin the chances of winning approval from U.S. regulators.
 
    
   PPR 
   The French luxury group is preparing to sell its book and CD retailer Fnac
and online fashion store La Redoute, Le Journal du Dimanche wrote, as part of a
strategy to concentrate on luxury and sports brands. 
   Le Figaro added that it would involve a spin-off in which PPR shareholders
would receive shares of a newly listed company, FNAC, on the French stock
exchange.
    
   SANOFI 
   The drugmaker's plan to restructure its research operations in France could
lead to more job losses than the 900 layoffs mooted by the company, union
representatives said. 
   The drugmaker said the results of a late-stage study of its Zaltrap drug
showed a "statistically significant improvement in overall survival" in patients
with colon cancer. 

    UBI, INTESA SANPAOLO 
    UBI Banca has begun selling part of its 1.2 percent stake in Intesa
Sanpaolo, whose shares have now risen above the price 1.11 euros on UBI's books,
La Repubblica said on Saturday. The stake could be sold in several tranches on
the market or to institutional investors, Il Sole 24 Ore said on Saturday.
    
    JULIUS BAER 
    Julius Baer announces details of the rights offering in connection with the
partial financing of the acquisition of the international wealth management
business of Bank of America Merrill Lynch outside the United States and
Japan. 
    
    EFG INTERNATIONAL 
    EFG International's subsidiary, EFG Financial Products launches
IPO, shares priced at 40-50 francs per registered share.  
    
    HEIDELBERGCEMENT 
    The economy would recover fast should Greece exit the euro zone, the
company's Chief Financial Officer Lorenz Naeger told Boersen-Zeitung in an
interview published on Saturday, adding that "everyone" was prepared for such a
move.
    
    METRO 
    Billionaire investor Nicolas Berggruen said a merger of his retail chain
Karstadt and Metro's Kaufhof department stores would still "make a lot
of sense", he was quoted by the WAZ newspaper group. 
    
   RCS 
   RCS shareholder Diego Della Valle aims to raise his stake in the publisher to
12-15 percent, Il Messaggero said on Saturday.
    
   AIR FRANCE-KLM 
   Etihad Airways, Abu Dhabi's flag carrier, will announce a code share
agreement with Air France-KLM on Monday, the Financial Times reported.
 

   MARCOLIN  
   Private equity fund Pai could bid 300 million euros for 30 percent of the
eyewear maker and delist the company, Il Sole 24 Ore said on Sunday.
    
   SMT SCHARF 
   It will be "hardly feasible" to keep results stable in 2013 compared with
2012, CEO Christian Dreyer told Frankfurter Allgemeine Sonntagszeitung in an
interview, adding the third-quarter was in-line with the company's expectations.
 
    
   DEXIA 
   The troubled Franco-Belgian bank is working on raising cash, its chief
executive told Belgian business newspaper L'Echo. 
    
   NETRECO  
   The Dutch food group said it has agreed to buy 75 percent of fish and
shrimp-feed company Gisis for 78 million euros from Latin American company
Expalsa.
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