Europe Factors to Watch-Stocks set to extend rally

Thu Dec 6, 2012 2:25am EST

PARIS, Dec 6 (Reuters) - European stocks are set to rise on Thursday, lifted
by renewed hopes of a deal in Washington to avoid the so-called fiscal cliff of
year-end tax hikes and spending cuts after reassuring comments from President
Barack Obama.
    At 0715 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were up 0.3-0.5 percent.
    Obama said on Wednesday a deal to avert the fiscal cliff was possible within
a week, though he expressed it as a hope not a prediction. His comments boosted
stocks on Wall Street and in Asia. 
    Investors will keep a close eye on the European Central Bank on Thursday,
which is expected to keep interest rates on hold but may offer clues on its
policy path for next year with updated forecasts likely to present a grim
outlook for the euro zone economy in 2013. 
    European shares rose on Wednesday, with a number of key indexes testing
their year high, helped by positive comments from China's new leader on the
outlook for growth.
    The euro zone's blue chip Euro STOXX 50 index has gained 11.9
percent so far this year - on track to post its best annual performance since
2009 - propelled by significant measures unveiled by the European Central Bank
to resolve the debt crisis that have soothed fears of break up of the euro zone.
    "The momentum is positive for equity markets, which remain cheap compared
with credit and government bonds," said Frederic Jamet, head of management at
State Street Global Advisors France.
    "The outlook for the asset class is bright, even though we haven't seen yet
a massive switch towards equities."
    The Euro STOXX 50 tested its year high on Wednesday, a peak at 2,611 points
hit in March, before retreating, while Germany's DAX, France's CAC 40
 and the FTSEurofirst 300 index of top European shares have all
hit year highs this week.
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 MARKET SNAPSHOT AT 0716 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,409.28   0.16 %     2.23
 NIKKEI                              9,545.16   0.81 %    76.32
 MSCI ASIA EX-JP                       535.48   0.05 %     0.27
 EUR/USD                               1.3055  -0.08 %  -0.0011
 USD/JPY                                82.42  -0.05 %  -0.0400
 10-YR US TSY YLD                       1.584       --    -0.01
 10-YR BUND YLD                         1.353       --     0.00
 SPOT GOLD                          $1,689.30  -0.24 %   -$4.11
 US CRUDE                              $87.73  -0.17 %    -0.15
 
  > GLOBAL MARKETS-Shares nudge up on Obama 'fiscal cliff' comments 
  > Dow, S&P rise, but Nasdaq sours with Apple in wild day 
  > Tokyo's Nikkei share average closes up 0.81 pct 
  > FOREX-Euro slips slightly ahead of ECB; jobs data lifts Aussie 
  > Gold inches down; lower prices lure physical buyers 
  > Copper takes breather after 5-day rally; US hopes support 
  > Brent steadies below $109, econ worries hurt; Mideast tensions eyed 
    
    COMPANY NEWS:
    
    HSBC HOLDINGS PLC 
    The lender might pay a fine of $1.8 billion as part of a settlement with
U.S. law-enforcement agencies over money-laundering lapses, according to several
people familiar with the matter. 
    
    BEIERSDORF 
    The firm raised its sales growth forecast for both the group and the
Consumer business segment to "well over 4 percent" on the back of a strong
business performance and higher expectations for 2012, it said on Thursday.
    
    EADS. DAIMLER, LAGARDERE 
    Shareholders in EADS announced on Wednesday they had reached agreement on
the biggest shake-up of control in the aerospace company since it was founded
over a decade ago, putting the bulk of its shares beyond government influence.
The accord to wind down a complex Franco-German power-sharing pact came weeks
after talks broke down to merge the group with UK defence contractor BAE Systems
 and borrows many of the mechanisms drawn up for the failed
deal. 
    
    GDF SUEZ 
    The French utility on Wednesday said it would cut costs in a bid to bolster
results by 3.5 billion euros a year starting in 2015 as it grapples with a
'challenging' European market.    
    The group also said it was dissolving a pact binding water and waste company
Suez Environnement's main shareholders as part of an effort to cut
debt by one third over 2 years. 
    Separately, Le Figaro.fr said the French government, which is due to
announce revised gas tariffs on Dec 10, may decide on a hike of close to 3
percent.

    BANCA MONTE DEI PASCHI 
   Standard & Poor's became the second credit ratings agency to cut Italian bank
Banca Monte dei Paschi di Siena to 'junk'  status on Wednesday, saying planned
state aid may not be enough to stop its capital and funding position from
worsening. 
    
    PPR 
    The French retail group said on Wednesday its Redcats mail order unit had
agreed to sell its U.S. plus-size fashion business, OneStopPlus Group, to
private equity firms Charlesbank Capital Partners and Webster Capital for an
enterprise value of $525 million. 
    
    TELECOM ITALIA 
    With a board meeting set for Thursday, Telecom Italia appears to be edging
towards a spin-off of its fixed-line network in a move that could raise up to 5
billion euros to cut debt, boost broadband investment and potentially revive its
shares. 
    
    BARCLAYS 
    South African bank Absa Group said on Thursday it will buy the
African operations of its parent Barclays for $2.1 billion, finalising a
longstanding plan to fuse their businesses on the fast-growing continent.
 
    
     EDF 
     Moody's Investors Service said on Wednesday it had changed to negative from
stable the outlook on the state-controlled utility's Aa3 senior unsecured debt
ratings. The change of outlook follows a recent ruling by France's Conseil
d'Etat which canceled the decision relating to the electricity distribution
tariffs for the third regulatory period (2009-2013, known as TURPE), the
statement said. 

    SAIPEM, ENI 
    The longstanding head of Italy's Saipem resigned on Wednesday
after news that the oil services group was being investigated for corruption
regarding contracts in Algeria. 
    
    DEUTSCHE BANK 
    Three former Deutsche Bank employees have filed complaints with the U.S.
securities regulators claiming the bank failed to recognize up to $12 billion of
unrealized losses during the financial crisis, the Financial Times reported on
Wednesday. 
    
    FINMECCANICA 
    Political meddling and concern that a foreign owner could cut jobs is
hindering the sale of Italian aerospace and defence group Finmeccanica's energy
and transport subsidiaries, raising the prospect of a credit downgrade.
 
    
     LUXOTTICA, PRADA 
     Italian eyewear maker Luxottica has renewed its license deal with luxury
goods group Prada to the end of 2018, the two companies said on Wednesday.
 
    
    ROLLS-ROYCE 
    The company said it had passed information to Britain's Serious Fraud Office
(SFO) relating to concerns about bribery and corruption involving its
intermediaries in overseas markets. 
    
    THYSSENKRUPP 
    Three key executives at the company, Germany's biggest steelmaker, are
leaving in a major board shake-up largely due to losses at Steel Americas, a
flagship project the company is now trying to get rid of. 
    
      STANDARD CHARTERED 
    The firm expects to pay $330 million to settle a case with U.S. regulators
who accused the Asia-focused bank of failing to comply with sanctions against
Iran, further denting profit growth this year. 
    
    WENDEL 
    French investment company on Thursday posted a 39.3 percent rise in its net
asset value over twelve months, boosted by a jump in the share prices of the
listed companies it has stakes in.