European Factors to Watch-Shares seen lower, consolidating gains

Wed Jan 16, 2013 2:39am EST

LONDON, Jan 16 (Reuters) - European stocks were set for a subdued opening on
Wednesday, with technical charts pointing to a phase of consolidation in key
indexes after last week's multi-month highs and concerns about global growth
also keeping investors cautious.
    At 0730 GMT, futures for Germany's DAX, France's CAC and
Britain's FTSE were down 0.2 percent.
    Futures for Euro STOXX 50 were also 0.2 percent lower, signalling a
third down session for the euro zone blue chip index as investors take profits
on a rally to 1-1/2-year highs of 2,735.36 points.
    "We had quite a good rally since the middle of November, so short term we
are overbought ... In the short term we could consolidate, and we have as the
next support the area around 2,660 points," said Petra Kerssenbrock, technical
analyst at Commerzbank.
    "But in the medium and long term, the investment buy signal is intact and is
likely to carry EuroSTOXX 50 further up in the course of the next month."
    From a fundamental viewpoint, global growth concerns were likely to keep
markets subdued after the World Bank slashed 2013 economic forecasts for
developed nations, predicting that the euro zone economy would shrink 0.1
percent. 
    News of a fall in foreign direct investment into China in 2012 added to the
gloomy economic backdrop, ahead of Friday's key fourth-quarter gross domestic
product (GDP) data from the world's top metals consumer. 
    In Europe, the strength of the euro - described as "dangerously high"
by Eurogroup President Jean-Claude Juncker on Tuesday - could further hurt
economic growth and exporters' profits. 
    However, strategists at Societe Generale advised against taking profits on
risky assets, with their proprietary risk indicator - which charts equity risk
premium against implied volatility - at an all time high.
    "Despite the recent recovery, euro zone assets are still trading at a
significant discount relative to those in the U.S.," SocGen's strategists said
in a note. Everything else being equal, the EuroSTOXX should trade at circa
3,300 (i.e. plus-25 percent upside) to normalise its relative valuation."
    
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  MARKET SNAPSHOT AT 
                                        LAST     PCT CHG    NET CHG
 S&P 500                            1,472.34      0.11 %       1.66
 NIKKEI                            10,600.44     -2.56 %    -278.64
 MSCI ASIA EX-JP   <.MIASJ0000PUS     556.22     -0.53 %      -2.94
                   >                                      
 EUR/USD                              1.3289     -0.11 %    -0.0014
 USD/JPY                               88.15     -0.71 %    -0.6300
 10-YR US TSY YLD                      1.820          --      -0.02
 10-YR BUND YLD                        1.506          --       0.00
 SPOT GOLD                         $1,683.69      0.31 %      $5.19
 US CRUDE                             $93.52      0.26 %       0.24
 
  
  > Asian shares fall on growth caution, Nikkei hit as yen gains 
  > Dow, S&P 500 inch up with retailers but Apple drags again 
  > Nikkei suffers biggest fall in 8 months as yen rebounds 
  > Bond prices rise on U.S. debt ceiling jitters 
  > Yen extends gains for second day, euro stung by Juncker 
  > Gold edges higher; platinum pauses after 6-day rally 
  > London copper steadies on U.S. spending uptick 
  > Brent rises towards $111 on US retail sales, small inventory gain 
    
    COMPANY NEWS
    EADS 
    The sector will be in focus as Japan's two leading airlines grounded their
fleets of Boeing 787s on Wednesday after one of the Dreamliner passenger
jets made an emergency landing, heightening safety concerns over a plane many
see as the future of commercial aviation. 
    
    AUTOS
    Europe's new car market shrank in December at its fastest monthly pace since
October 2010, closing a year burdened by heavy declines in all major euro zone
economies. 
    
    UK BANKS
    Britain's banking industry and financial regulator are in talks to establish
a cut-off date to end the costly stream of claims from the public relating to
banks' mis-selling of payment protection insurance (PPI), the Times reported.
 
    
    DAIMLER 
    The European Commission will seek to prosecute nations that flout a new EU
law requiring use of an environmentally friendly coolant in vehicle
air-conditioning, which Daimler says is dangerous. 
    
    CASINO 
    The retailer said sales fell in the fourth quarter in its core French market
- including a near 10 percent drop at its hypermarkets - after it funded
permanent price cuts on basic products by reducing promotions, attracting fewer
shoppers. 
        
    VOLKSWAGEN 
    A Brazilian court on Tuesday overturned a ruling made last week ordering
Volkswagen to recall up to 400,000 one-litre cars over an unusual engine noise,
a statement on the court's website said. 
        
    DEUTSCHE WOHNEN 
    The German real estate investor plans to increase its capital by 10 percent
in a dilutive share issue that will fund recently signed property deals and
future acquisitions..
    
    FAURECIA 
    The French auto parts maker posted a 62 percent drop in full-year net
income, due partly to restructuring charges related to falls in production in
Europe's car markets, and said net debt rose more than forecast. 
    
    ALCATEL-LUCENT 
    The government is closely examining a loan to the telecom gear company from
Goldman Sachs and Credit Suisse to ensure that it does not threaten the future
of the group, French Finance Minister Pierre Moscovici said in parliament. 
    
    GDF SUEZ 
    Two Belgian nuclear reactors owned by GDF unit Electrabel may not need to be
halted permanently pending further tests and more information, Belgium's nuclear
watchdog FANC said. 
    
    ADP 
    Traffic at Paris' airports fell 1.8 percent in December to 6.73 million
passengers, led by a 4.9 percent drop in France and a 1.3 percent decline
elsewhere in Europe. 
    
    FIAT 
    Chrysler, majority-owned by Fiat, said on Tuesday it has agreed to make
Jeeps in China with partner Guangzhou Automobile Group Co Ltd, a key
step toward its goal of building Jeep into a global brand.
    Separately, Fiat has asked the government to approve a special lay-off
scheme at its Melfi plant in southern Italy so it can restructure the factory
before production of new models starts. 
    
    FINMECCANICA 
    Italy's state-controlled defense group said on Tuesday that its
AgustaWestland unit won a contract to sell eight AW159 helicopters to South
Korea for 270 million euros ($360.39 million).
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