Europe Factors to Watch-Stocks set to inch higher

Tue Dec 11, 2012 2:35am EST

PARIS, Dec 11 (Reuters) - European stock index futures pointed to a slightly
higher open on Tuesday, helped in part by signs U.S. budget talks to avoid the
"fiscal cliff" were picking up pace.
    At 0725 GMT, futures for Euro STOXX 50, for  Germany's DAX 
and for France's CAC were flat to up 0.15 percent.
    On Monday, the White House and House of Representatives Speaker John
Boehner's office held negotiations on ways to break the impasse over the fiscal
cliff, steep tax hikes and budget cuts which will automatically kick in next
month if a deal is not reached before the end of the year.
    Neither side gave any public signs that they were ready to give ground, but
on Capitol Hill, there were indications that preparations were under way for
quick legislative consideration of a deal if one is reached soon.
 
    "That's the last big hurdle this year. It's going to be tense, but we'll get
a deal at the end, and you don't want to miss the rally that will follow," a
Paris-based trader said.
    Investors will also keep an eye on the U.S. Federal reserve, whose two-day
meeting begins on Tuesday. The Fed is expected to announce it will buy $45
billion per month of longer-dated Treasuries beginning in January to replace the
current Operation Twist programme, which expires at the end of December.
 
    Resource-related companies and steelmakers will be in the spotlight after
ThyssenKrupp posted a 4.7 billion euro net loss for the year, hurt by
a massive write-down on steel mills in the United States and Brazil that it is
trying to sell. 
    UK banks will also be in focus after HSBC agreed to pay $1.92
billion to settle a U.S. criminal probe into money-laundering lapses, the
largest penalty ever paid by a bank, while Standard Chartered Plc 
agreed to pay $327 million to resolve allegations that it violated U.S.
sanctions against Iran, Sudan and two other countries. 
 
    On the macro front, investors awaited Germany's ZEW economic sentiment
index, due at 1000 GMT, expected to show a reading of -12.0 compared with -15.7
a month ago. The ZEW current condition index is forecast to fall to 5.0 from 5.4
a month ago.
    European stocks ended mixed on Monday, with German, UK and French benchmark
indexes recovering in late trading after the initial shock from the resignation
of Italy's Prime Minister Mario Monti, although Italian stocks took a hit while
the country's debt yields surged.
    "European stocks' positive trend is intact. Indexes are still in the process
of hitting 2012 highs. The only laggard has been the Euro STOXX 50, which has
yet to close above its 2012 peak," Aurel BGC chartist Gerard Sagnier said.
    "There's no selling pressure. Just like we saw yesterday, every
consolidation is short lived and stocks bounce back. Market players are starting
to position themselves for the medium term. They don't want to miss the rally
which could quickly bring indexes to 2011 highs."

--------------------------------------------------------------------------------
 MARKET SNAPSHOT AT 0727 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,418.55   0.03 %     0.48
 NIKKEI                              9,525.32  -0.09 %    -8.43
 MSCI ASIA EX-JP                       539.43   0.23 %     1.24
 EUR/USD                               1.2944   0.03 %   0.0004
 USD/JPY                                82.36   0.04 %   0.0300
 10-YR US TSY YLD                       1.616       --     0.00
 10-YR BUND YLD                         1.293       --     0.00
 SPOT GOLD                          $1,708.90  -0.16 %   -$2.69
 US CRUDE                              $85.70   0.16 %     0.14
 
  > GLOBAL MARKETS-Stocks rise; Fed move, fiscal cliff in focus 
  > Wall St gets small lift from technology and McDonald's 
  > Nikkei dips, investors cautious after 10-pct rally on month 
  > FOREX-Euro steadies off two-week low, Fed next focus 
  > Gold inches lower; Fed expectations lend support 
  > LME copper eases from near two-month high; U.S. eyed 
  > Brent eases to near $107 as U.S., Italy rattle investors 
    
    COMPANY NEWS:
    
    THYSSENKRUPP 
    Germany's top steelmaker posted a 4.7 billion euro ($6.1 billion) net loss
for the year as it took a painful write-down on steel mills in the United States
and Brazil that it is trying to sell. 
    
    HSBC 
    HSBC has agreed to pay $1.92 billion to settle a multi-year U.S. criminal
probe into money-laundering lapses at the British lender, the largest penalty
ever paid by a bank. 
    
    STANDARD CHARTERED PLC 
    Standard Chartered agreed to pay $327 million to resolve allegations that it
violated U.S. sanctions against Iran, Sudan and two other countries, capping
months of legal headaches for the British bank. 

    INTERNATIONAL AIRLINES GROUP 
    Unions at Spanish airline Iberia, part of International Airlines Group, on
Monday called off a six-day strike in December, while warning that protests over
massive job cuts could follow later. 
    
    DIAGEO 
    British drinks group said on Tuesday that its long-running talks to buy
world's no. 1 tequila maker Jose Cuervo had ended. 
    
    NOVARTIS 
    Novartis AG's blood cancer drug Tasigna is better at treating a type of
chronic myeloid leukaemia than its older drug Glivec, according to data from two
late-stage trials, boosting prospects for its oncology franchise. 
    
    KBC 
    The Belgian banking and insurance group is selling 1.25 billion euros of new
shares to shore up its capital position as it pays back state aid to Belgium.
 
    
    IMPREGILO 
    Italy's biggest builder said on Monday the Brazilian competition regulator
had approved the sale of a 19 percent stake in Brazil-based EcoRodovias
. 
    
    AUTOGRILL 
    The world's biggest airport retailer outbid rivals to run duty free shops at
26 Spanish airports owned by public operator Aena, including key hubs such as
Madrid and tourist destinations Malaga and Ibiza.
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