European Factors to Watch-Shares to inch towards 18-month highs

Mon Dec 10, 2012 1:39am EST

LONDON, Dec 10 (Reuters) - European equities were expected to open
fractionally higher on Monday to trade near the previous session's 18-month
highs, with encouraging Chinese factory data and a U.S. jobs report improving
the global economic outlook.
    However, political uncertainties in highly indebted Italy, which is trying
hard to bring its economy back on track, and slow progress in talks to avert the
U.S. "fiscal cliff" of $600 billion in spending cuts and tax increases from the
new year were likely to keep gains under check in the last weeks of the year.
    Italian Prime Minister Mario Monti announced on Saturday he would resign
once the 2013 budget is approved, while in the United States, President Barack
Obama met with Republican Speaker of the House of Representatives John Boehner
on Sunday to negotiate ways to avoid the austerity measures.
    Investors are expected to gather confidence from a weekend survey showing a
pickup in China's factory output and retail sales growth to eight-month highs.
However, the country's November trade data highlighting a weaker-than-expected
rise in exports took some of the shine off and was seen prompting investors to
stay cautious.
    Financial spreadbetters predicted Britain's FTSE 100 would open 5 to
8 points higher, or as much as 0.14 percent, Germany's DAX would gain 8
to 10 points, or as much as 0.13 percent and France's CAC 40 would rise
about 4 points, or as much as 0.11 percent.
    
     MARKET SNAPSHOT AT 0625 GMT                                
                                               LAST    PCT CHG   NET CHG
     S&P 500                               1,418.07     0.29 %      4.13
     NIKKEI                                9,533.75     0.07 %      6.36
     MSCI ASIA EX-JP                                    0.27 %      1.43
     EUR/USD                                 1.2905     0.08 %    0.0010
     USD/JPY                                  82.40     0.09 %    0.0700
     10-YR US TSY YLD                         1.613         --     -0.01
     10-YR BUND YLD                           1.296         --      0.01
     SPOT GOLD                            $1,707.71     0.22 %     $3.67
     US CRUDE                                $86.41     0.56 %      0.48
 
    * Asian shares firm as China, U.S. data brighten outlook     
    * Nikkei hits 7-mth high, edging back to overbought territory 
    * Dow, S&P rise on jobs, but Apple bites Nasdaq again        
    * Euro hugs two-week low as Italy hit by political storm     
    * Brent steady above $107; China, US data spur demand hopes  
    * Copper rallies on China data; euro zone woes cap gains     
    * Gold steady above $1,700/oz; eyes on Fed meeting           
    * TREASURIES-Prices fall on job growth, ahead of new supply
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