Europe Factors to Watch-Shares set to dip after Bernanke speech

Tue Jan 15, 2013 2:34am EST

PARIS, Jan 15 (Reuters) - European stocks are set to dip on Tuesday, with a
blue-chip index hovering around a major resistance level, as comments from U.S.
Federal Reserve Chairman Ben Bernanke failed to reassure investors on the
outlook for the U.S. economy and the country's debt ceiling talks.
    At 0727 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were down around 0.2 percent.
    Bernanke gave a cautiously optimistic outlook for the U.S. economy but fell
short of giving clear hints about when the central bank would start to curb its
aggressive bond purchases, despite speculation that the programme will be halted
this year. 
    Growing worries about the U.S. debt ceiling negotiations also kept investors
on edge, with Bernanke urging lawmakers to lift the country's borrowing limit to
avoid a potentially disastrous debt default.
    The United States scraped up against its $16.4 trillion debt ceiling on
December 31 and is now employing special measures to meet its financial
obligations. The Treasury Department said those steps could be exhausted by
mid-February. 
    "The dawning realisation that we are in for a re-run of the recent 'down to
the wire' fiscal cliff showdown is once again set to keep traders in a bipolar
mental state regarding the U.S., and thus global, economy," London Capital Group
dealer Jonathan Sudaria wrote in a note.
    The euro zone's blue chip Euro STOXX 50 index has gained about 3
percent since the start of the year, but has failed to break above a key
resistance zone at 2,710-2,720, which represents the starting point of the
index's 30 percent plunge in mid-2011 during the heat of the euro zone debt
crisis.
    Despite the pause of the past few days, Aurel BGC chartist Gerard Sagnier
sees more potential on the upside for equities.
    "Volumes are low, there's no selling pressure, and the market is awaiting a
catalyst to start rallying again. The potential is clearly on the upside, and we
recommend buying all the dips," he said.
    The mining sector will be in the spotlight on Tuesday after Rio Tinto
 said it aims to boost iron ore output by 15 percent this year after
production in 2012 climbed to 253 million tonnes, beating its own target, as
resurgent Chinese demand drives a price recovery. 
    On the macro front, investors awaited Germany's GDP numbers for 2012, due at
0800 GMT, looking for insight on the extent of the damage on the German economy
from the recession in most of Europe.
      
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 MARKET SNAPSHOT AT 0728 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,470.68  -0.09 %    -1.37
 NIKKEI                             10,879.08   0.72 %    77.51
 MSCI ASIA EX-JP                       558.16  -0.53 %    -2.99
 EUR/USD                               1.3345  -0.28 %  -0.0037
 USD/JPY                                88.79  -0.75 %  -0.6700
 10-YR US TSY YLD                       1.832       --    -0.02
 10-YR BUND YLD                         1.537       --    -0.02
 SPOT GOLD                          $1,674.80   0.48 %    $8.00
 US CRUDE                              $93.77  -0.39 %    -0.37
 
  > GLOBAL MARKETS-Nikkei up on yen weakness, Asian shares cautious 
  > Apple drags on S&P, Nasdaq; Dell jumps after report 
  > Nikkei hits 32-month high on weak yen; Sharp down on Apple report 
  > TREASURIES-U.S. bonds firmer, seen supported by Fed purchases 
  > Yen rebounds on Japan Amari's comments, dlr struggles after Fed 
  > Platinum hits 3-mth high on supply worry; Tokyo gold at record 
  > METALS-Copper climbs as Fed comments erode dollar 
  > Brent holds above $111; US debt, forecast oil stocks gain weigh 
    
    COMPANY NEWS:
    
    RIO TINTO, MINING SECTOR
    Rio Tinto said it aims to boost iron ore output by 15 percent this year
after production in 2012 climbed to 253 million tonnes, beating its own target,
as resurgent Chinese demand drives a price recovery. 
    
    EDF 
    The French utility will announce cost cuts of one billion euros by 2015 when
it releases its full-year results next month, French daily Le Figaro said,
adding that the group foresees no job cuts. 
    
    FRENCH BANKS    
    The French central bank proposed on Monday that the interest rate on
regulated, tax-free savings accounts known as Livret A be trimmed to 1.75
percent from 2.25 percent currently. 

    COMMERZBANK 
    The lender aims to complete talks with labour representatives by the end of
June about possible changes to its branch network and working hours, management
board member Martin Zielke told Frankfurter Allgemeine Zeitung in an interview.
    
    ALCATEL-LUCENT 
    France Telecom would consider taking over the subsea cables
business of Alcatel-Lucent, Chief Executive Stephane Richard said, as the
telecoms gear maker seeks to ease its debt burden. 
    Bloomberg later reported that private equity funds Permira and PAI were
weighing bids, as was French sovereign wealth fund FSI. Spokespeople from
Permira and PAI declined to comment, while FSI was unavailable for comment.
    
    PPR 
   The luxury goods group said it had acquired 51 percent of Scottish designer
Christopher Kane's eponymous designer brand, saying the investment would allow
the London-based firm to accelerate its expansion. Terms were not disclosed.

    DAIMLER  
    Daimler is not aware of China Investment Corp's (CIC) plans to take a stake
in the company and is not in talks with CIC, Chief Executive Dieter Zetsche told
reporters at the Detroit auto show on Monday. 
    Separately, German daily Handelsblatt cited Zetsche as saying that he now
expects to catch up with rival premium carmakers Audi and BMW
 by 2018, two years earlier than expected.
   Related news 
    
    HMV GROUP 
    The music and DVD retailer said it was calling in the administrators after a
last-ditch attempt to secure funding failed, bringing the curtain down on one of
Britain's best-known high street retail stores. 
       
    FRAPORT 
    Passenger numbers at Frankfurt airport were down 6.3 percent in December,
the airport operator said. Cargo volume was down 1.6 percent in the last month
of the year. 
    
    COLAS  
   Bouygues subsidiary Colas said its consortium had won an eight-year highways
and works contract in London worth 520 million euros ($695.03 million), of which
Colas has a 40 percent share.
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