European Factors to Watch - Shares to pause on fiscal cliff indecision

Fri Nov 30, 2012 2:27am EST

LONDON, Nov 30 (Reuters) - European stocks are seen opening little changed
on Friday, taking a breather as key indexes neared the upper end of their recent
range and mixed signals about U.S. budget talks kept investors on edge.    
      At 0716  GMT, futures for the Euro STOXX 50, Germany's DAX
, France's CAC and Britain's FTSE were flat to 0.1
percent higher.
     The Euro STOXX 50 rose 1.4 percent to a two-month closing high
of at 2,581.69 on Thursday, boosted by rising expectations that U.S. lawmakers
will reach an agreement to postpone a 'fiscal cliff' of growth-curbing austerity
measures due to take effect in 2013. The Euro STOXX 50 Volatility Index,
or VSTOXX, Europe's widely-used measure of investor risk aversion, fell to a
five-year low on Thursday.   
    But the House of Representatives Speaker John Boehner poured cold water on
investors' optimism after the European market close, when he said fiscal cliff
talks with the White House had made no substantive progress, sending U.S. shares
temporarily lower. 
    The Euro STOXX 50 faces resistance at around 2,600 points, the upper end of
the 150-point range that has trapped the index since early September as worries
about the fiscal outlook in the U.S. and debt-laden euro zone countries such as
Spain and Greece curbed a boost from central bank stimulus measures.
    Germany's Dax and France's CAC-40 are also close to
September's highs and Britain's FTSE 100, which rose 1.2 percent to
5,870 points on Thursday, was capped by resistance at around 5,920-5,930 points,
tested three times in the past three months. 
    "If the FTSE 100 approaches 5,900 then we will be seriously reducing long
exposure and taking profits," Ed Woolfitt, head of trading at Galvan, said.
     "We will leave a small amount of exposure - just in case this is the time
we break out into the 6,000s - although stops will be up tight in case we don't.
And, let's be frank, we haven't managed it all year so it is going to take some
serious good news to force it."    
    An early September pledge by the European Central Bank to help countries
that apply for a bailout had helped ease investor concerns about a possible euro
zone break-up. 
    Germany's parliament was expected to approve a fresh bailout for Greece on
Friday, in a vote seen as a test of Chancellor Angela Merkel's authority over
her centre-right coalition less than a year before federal elections.
    The outcome of Friday's vote in the Bundestag lower house is not in doubt
but Germans are deeply uneasy over the costs of the euro zone debt crisis and
the number of coalition lawmakers voting against will be keenly watched.
 
    Euro zone unemployment was expected to have risen to new record highs, with
Eurostat data due at 1000 GMT expected to show 10.9 percent of the region's
workforce was unemployed.
    A reshuffle of MSCI's global indices was due to take place on Friday,
meaning trading volume could tick up as investors who track indexes rebalance
their portfolios.
    "(The) MSCI quarterly rebalance in the closing auction today should at least
mean market volumes will be better than recent dire levels," a London-based
trader said.
    Dutch telecoms group Ziggo is set to be the largest European
addition the MSCI World Index.    
--------------------------------------------------------------------------------

    
 MARKET SNAPSHOT AT 0717 GMT                         
                                      LAST  PCT CHG     NET
                                                        CHG
 S&P 500                          1,415.95   0.43 %    6.02
 NIKKEI                           9,446.01   0.48 %   45.13
 MSCI ASIA                                   0.69 %    3.64
 EX-JP                                               
 EUR/USD                            1.3025   0.37 %  0.0048
 USD/JPY                             82.51   0.47 %  0.3900
 10-YR US                            1.627       --    0.01
 TSY YLD                                             
 10-YR BUND                          1.384       --    0.01
 YLD                                                 
 SPOT GOLD                       $1,729.00   0.24 %   $4.21
 US CRUDE                           $88.01  -0.07 %   -0.06
 
  
  > Asian shares firm on position-squaring, data eyed           
  > Wall St ends higher after swings on 'fiscal cliff'          
  > Weak yen helps Nikkei to 7-mth high                         
  > US budget worries boost benchmark prices for 4th day        
  > Yen eases on month-end flows but stays above 7-1/2-mth low  
  > Gold headed for biggest weekly loss since early Nov         
  > LME copper inches up, eyes monthly gain on China prospects  
  > Brent drops toward $110 on U.S. fiscal worries              
    
    COMPANY NEWS
   
    BAYER 
    The drugmaker has filed a suit in the United States against Indian generic
drug maker Lupin to prevent it from selling a version of Bayer's
birth-control pill Natazia there. 
    
    DEUTSCHE BANK 
    Germany's biggest bank said it has struck a deal to sell its Deutsche Card
Services to EVO Payments International. It did not disclose financial details.
 
    
    THYSSENKRUPP 
    The steelmaker is investigating suspicious payments of tens of millions of
euros reportedly made by employees to drive its business in eastern Europe and
Asia, Handelsblatt reported.

    PORSCHE 
    A lawyer for the carmaker urged a New York state appeals court to overturn a
lower court decision allowing 26 hedge funds to sue the German automaker in the
state. 
    
    RENAULT, PEUGEOT  
    Both French car makers were hit by strikes on Thursday as they eye moves to
cut costs and boost productivity amid slumping sales. 
    
    THALES 
    Europe's leading defence electronics group said on Thursday it will pay an
interim dividend of 0.25 euros per share for financial year 2012. 
    
    ROYAL BANK OF SCOTLAND 
    The state-owned bank could be forced to explore the sale of businesses
considered "core" to its operations after the Bank of England increased the
pressure on lenders to raise new capital, writes the Telegraph.
    
    BARCLAYS BANK 
    The UK lender said on Thursday it was prepared to fight a proposed $470
million fine for alleged manipulation of the electricity market.