Europe Factors to Watch-Shares set to dip on U.S. fiscal cliff worries

Wed Nov 28, 2012 2:41am EST

PARIS, Nov 28 (Reuters) - European stocks are set to open slightly lower on
Wednesday, retreating for only the second time in eight sessions, as comments
from U.S. Senate Majority Leader Harry Reid on the lack of progress in budget
talks prompt investors to book recent gains.
    At 0727 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were down 0.3 percent.
    Reid, a Democrat, said he was disappointed that there had been "little
progress" among Democrat and Republican lawmakers as they try to reach a deal to
avoid the year-end "fiscal cliff" of $600 million in spending cuts and tax
hikes, which could derail the U.S. economic recovery. 
    His comments sparked a late-session slide on Wall Street, with the S&P 500
 losing 0.5 percent.
    European shares rose on Tuesday, with the euro zone's blue chip Euro STOXX
50 index reaching a six-week high, after a deal by international
lenders to cut Greece's debt gave some short-term support to investor sentiment.
    The Euro STOXX 50 has jumped about 25 percent in the past six months,
strongly outperforming U.S. stocks indexes, as strong measures unveiled by the
European Central Bank to resolve the three-year-old debt crisis have soothed
fears of a break-up of the currency bloc.
    "The market has proved resilient to a raft of negative news in the past few
weeks, and now the newsflow is turning positive, with Greece's deal and
improvement on the macro front," Saxo Banque senior sales trader Alexandre
Baradez said.
    "On the fiscal cliff, Republicans would be shooting themselves in the foot
if they refuse to make concessions. They seem to be more reasonable than last
year, so it will be tense but at the end they'll reach a deal, and there will be
a Christmas rally."
    The Euro STOXX 50's next strong support level is at 2,509 points, the
index's 50-day moving average, while the next resistance level is at 2,580, a
high hit in mid-October.
    "The buying pressure is still dominant, and the bears are hesitating," Aurel
BGC chartist Gerard Sagnier said.
    "They fear that this could be the early days of a 2013 rally, which is my
scenario. The upside potential for the next three months at least 10 percent." 
    
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 MARKET SNAPSHOT AT 0734 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,398.94  -0.52 %    -7.35
 NIKKEI                              9,308.35  -1.22 %  -114.95
 MSCI ASIA EX-JP                       521.37  -0.54 %    -2.85
 EUR/USD                               1.2917  -0.21 %  -0.0027
 USD/JPY                                81.80   -0.4 %  -0.3300
 10-YR US TSY YLD                       1.632       --    -0.01
 10-YR BUND YLD                         1.419       --    -0.01
 SPOT GOLD                          $1,738.60  -0.18 %   -$3.05
 US CRUDE                              $86.99  -0.22 %    -0.19
 
  > GLOBAL-MARKETS-Shares fall as focus shifts to U.S. budget talks 
  > Wall St falls, hit by Reid's 'fiscal cliff' comments 
  > Nikkei falls, set to end four-day winning run on U.S. fiscal woes 
  > U.S. 10-year notes supported by fiscal crisis worries 
  > Euro moves lower on U.S. fiscal fears, Greece debt doubts 
  > Gold flat as investors shift focus to U.S. fiscal talks 
  > LME copper slips as U.S. fiscal cliff worries resurface 
  > Brent hovers over $110, U.S. fiscal worries weigh 
    
    COMPANY NEWS:
    
    SWISS LIFE 
    Swiss Life said on Wednesday it will slash by 576 million Swiss francs
($618.39 million) the valuation of the German advisory arm it bought just four
years ago, and drop the name AWD as it draws a line under the troubled brand.
 
    
    LA CAIXA, BANCO DE VALENCIA 
    Spain's third largest bank La Caixa is to buy nationalised Banco
de Valencia for the nominal fee of 1 euro, the country's bank
restructuring fund confirmed on Tuesday. 
    
    BBVA 
    Spanish second-biggest bank sold a Mexican pension fund to Mexico's Banorte
 in a deal valued at $1.6 billion. The lender had
previously said it was considering selling its pension funds in Chile, Colombia,
Peru and Mexico.
    ž
    BANKIA 
    The largest of Spain's nationalised banks Bankia is due to present
its business plan for 2012-2015 on Wednesday. That came after Tuesday's approval
by the Bank of Spain of the restructuring plans of all four of the country's
nationalised banks. On Wednesday they should also be signed off by the European
Commission. 
    
    RAIFFEISEN BANK INTERNATIONAL 
    Profits at Austria's lender rose to 141 million euros ($182.3 million) in
the third quarter from 130 million a year earlier, in line with market
expectations, as risk provisions fell, the bank reported on Wednesday.
 
    
    BANCO POPULAR 
    The subscription period for Spanish lender Banco Popular's
2.5-billion-euro($3.23 billion) rights issue ends on Wednesday. Popular,
burdened by soured property assets and which is aiming to raise funds to avoid
the need for state aid, has already covered 80 percent of the capital raising,
local media reported earlier in the week.
    
    SIEMENS 
    The engineering group is expected to publish details of the long-awaited
spin-off of Osram on Wednesday after its supervisory board meets to set out a
future course for the lighting unit. 
    
    ARCELORMITTAL 
    President Francois Hollande pressed the head of the steelmaker to avert the
closure of two blast furnaces in northeastern France, raising the possibility of
a state takeover while waiting for a buyer. 
    
    TELEFONICA 
    Europe's biggest telecoms group by revenue created a Spanish holding company
-- called Telefonica Latinoamerica Holding SL -- grouping together its Latin
American businesses, which could list in New York or in Spain, Cinco Dias
reported.
    
    DEUTSCHE BANK 
    Deutsche Bank's compliance chief Stephan Leithner and former board member
Hugo Baenziger face skeptical German lawmakers on Wednesday as parliamentarians
seek answers about how banks manipulated global benchmark interest
rates. 
    
    METRO CELESIO 
    Family-owned conglomerate Haniel said it would sell down stakes
in retailer Metro to 30.01 percent and its stake in drugs distributor
Celesio to 50.01 percent as a way to reduce its debt levels to below
2 billion euros ($2.59 billion). 
    
    CASINO 
   The French controlling shareholder of Grupo Pao de Acucar  
is not considering a sale of the Brazilian retailer's home appliance unit even
though Pao de Acucar's chairman has voiced interest in acquiring it, two sources
familiar with the situation said. 
    
    THYSSENKRUPP, SOGEFI 
    Italian car components maker Sogefi said on Tuesday it has ended talks to
buy ThyssenKrupp's suspension business, Eibach Federn. 
    
    LUXOTTICA 
    Italy's Luxottica, the world's biggest premium eyewear maker, will spend 45
million euros to become a minority shareholder in optical retailer Salmoiraghi &
Vigano. 

    BOSKALIS 
    The Dutch dredging and maritime services company holds a 33 percent stake in
maritime transport firm Dockwise  after buying more shares,
Boskalis said. 
    
    CONTINENTAL AG 
    Continental board member Nikolai Setzer told German daily Handelsblatt that
the auto supplier and tyre maker wants to narrow the gap to competitors
Bridgestone, Michelin and Goodyear by expanding in emerging markets. Continental
has a strategy to cut its dependency on Europe by expanding on the American
continent.
    
    VINCI 
    The construction and concessions group said it won a 105 million-euro
contract to upgrade a pier at the south terminal of London's Gatwick Airport,
with construction due to start next month and run until September 2015.
 
    
    PAGESJAUNES 
    The telephone directory group said it had completed the refinancing of its
bank debt, two weeks after it announced it had reached a deal with creditors.
 
    
    BANCO POPOLARE 
    Moody's Investors Service placed Italian bank Banco Popolare's ratings on
review for downgrade on Tuesday, citing deteriorating assets quality and weak
capital generation amid a deep recession in Italy.
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