European Factors to Watch-Shares seen up for 8th day, Fed eyed

Wed Dec 12, 2012 1:53am EST

LONDON, Dec 12 (Reuters) - European shares were set to rise for an eighth
straight session to a new 18-month high on Wednesday, with expectations of more
stimulus from the Fed and hints of some progress on U.S. budget talks helping
sentiment.
    Financial spreadbetters predicted Britain's FTSE 100 to open 5 to 7
points higher, or as much as 0.1 percent, Germany's DAX to gain 20 to
25 points, or as much as 0.3 percent, and France's CAC 40 to rise 16 to
19 points, or as much as 0.5 percent. 
    "The rally continues off the back of anticipation that the U.S. Federal
Reserve will step up monetary easing," Zahid Mahmood, senior dealer at Capital
Spreads, said in a note.
    "Further progress is also expected on the budgetary front with regard to the
U.S. "fiscal cliff" in an effort to further support an economy that seems to be
showing the first tentative signs of having turned the corner." 
    The U.S. central bank is expected to extend its purchases of mortgage-backed
debt and replace another expiring stimulus program with a new bout of money
creation following the latest FOMC meeting on Wednesday.  
    And negotiations to avert about $600 billion in spending cuts and tax rises
ahead of a year-end deadline intensified as President Barack Obama and U.S.
House of Representatives Speaker John Boehner spoke by phone on Tuesday after
exchanging new proposals. 
    The FTSEurofirst 300 index closed up 0.4 percent at 1,138.85 points
on Tuesday, its highest finish since mid-2011 and taking its gains for the past
three weeks to 7 percent. U.S. stocks also closed 0.6 to 1.2 percent higher,
while Japan's Nikkei average climbed 0.6 percent on Wednesday.
      
     MARKET SNAPSHOT AT 646 GMT                                
                                              LAST    PCT CHG   NET CHG
     S&P 500                              1,427.84     0.65 %      9.29
     NIKKEI                               9,581.46     0.59 %     56.14
     MSCI ASIA EX-JP                                   0.73 %      3.92
     EUR/USD                                1.3003    -0.01 %   -0.0001
     USD/JPY                                 82.66     0.18 %    0.1500
     10-YR US TSY YLD                        1.652         --      0.00
     10-YR BUND YLD                          1.322         --     -0.01
     SPOT GOLD                           $1,711.71     0.11 %     $1.86
     US CRUDE                               $85.84     0.06 %      0.05
 
    * Asian shares rise, Fed outcome presssures dollar           
    * Nikkei hits 7-1/2 mth high on tech shares                  
    * Big tech boosts S&P 500 to best close since election       
    * Dollar under pressure as market eyes Fed stimulus          
    * Brent stays above $108 after OPEC cuts output              
    * LME copper steady on China pickup, Fed stimulus hopes      
    * Gold steady as investors await Fed meeting outcome         
    * Prices drop on U.S., Europe hopes; Fed eyed
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