European Factors to Watch - Shares to consolidate near 2-year highs
LONDON, Jan 29 (Reuters) - European stocks were seen edging higher on Tuesday, consolidating near two-year highs as optimism over a solid start to the earnings season was mitigated by concerns that a string of upbeat U.S. economic data may bring forward the end of monetary stimulus. At 0712 GMT, futures for Euro STOXX 50 were 0.2 percent higher, while contracts for Germany's DAX, France's CAC and Britain's FTSE 100 were 0.1 percent higher. The pan-European FTSEurofirst 300 fell 0.2 percent to 1,172.99 points on Monday after touching an intra-day peak of 1,176.19 points, a level not seen since March 1, 2011. The euro zone Euro STOXX 50 index closed steady at 2,744.50 points after setting a fresh peak of 2,753.93 in the wake of stronger-than-expected U.S. durable goods orders, which showed that firms in the world's largest economy had stepped up spending. Traders speculated more solid U.S. growth indicators might see the U.S. Federal Reserve pull back on its aggressive easing stimulus, which has played a key role in fuelling an equity market rally in the second half of last year. Investors were now awaiting the outcome of a two-day Federal Reserve policy meeting due to start on Tuesday, as well as Friday's string of data, including a key U.S. jobs report for further cues. "With markets posting significant gains for the year already, traders are becoming more demanding in their need for positive cues to keep up the buying momentum," Jonathan Sudaria, a dealer at Capital Spreads, said in a trading note. "That call will be answered as some market moving data out of the U.S. is on the itinerary over the next few days culminating in the jobs figure on Friday." The euro zone Euro STOXX 50 is up 4.1 percent year to date and it has surged 27 percent since late July, largely boosted by stimulus programmes from central banks across the world. Bond-buying programmes unveiled by the Fed and the European Central Bank in the second half of last year were leading investors out of safe heaven German Bunds and U.S. Treasuries and into equities, which offer higher returns. The Euro STOXX 50 has gained just over 1 percent since Jan. 3 and its Relative Strength Index, a momentum indicator, has been capped just below 70 points, a level that indicates "overbought" conditions, suggesting a degree of caution was setting in after the sharp rally. The pace of flows into equity funds also showed some signs of slowing, despite outgaining bond funds for the seventh straight week last week, EPFR Global data showed. "Investors are taking their time. The client-base we speak to are still very cautious after a few years of difficult market," said Johan Jooste, chief market strategist for Europe, the Middle East and Africa at Merrill Lynch Wealth Management. "Most of the retail and high-net individual client base we speak tend to have a strong (fixed) income focus. As these assets have become more expensive, they're forced into other ones and...(they) have to rethink their asset allocation." REASSURING EARNINGS The U.S. earnings season had also sent reassuring signals about the health of global economies, with Internet company Yahoo among the latest companies to report better-than-expected figures. With one third of the reporting season now complete, 73 percent of companies that have reported results that have met or beaten expectations. While the European reporting season has only just started, with results out from just 10 percent of companies due to report, early signs have been moderately positive. Around 60 percent of companies that have reported so far have beaten or met consensus estimates, Starmine data showed, although it is worth remembering expectations had been significantly lowered last year. Philips Electronics reported in-line results on Tuesday and agreed to sell its audio and video unit to Japan's Funai Electric Co, quitting one of its traditional businesses. [ID: nL5N0AY127] -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0712 GMT: LAST PCT CHG NET CHG S&P 500 1,500.18 -0.18 % -2.78 NIKKEI 10,866.72 0.39 % 42.41 MSCI ASIA EX-JP 0.8 % 4.40 EUR/USD 1.3441 -0.1 % -0.0014 USD/JPY 90.71 -0.14 % -0.1300 10-YR US TSY YLD 1.972 -- 0.01 10-YR BUND YLD 1.688 -- -0.01 SPOT GOLD $1,662.90 0.52 % $8.56 US CRUDE $96.91 0.49 % 0.47 > GLOBAL MARKETS-Asian shares rise, cautious before Fed, US data > S&P 500 eases, ends longest winning run in 8 years > S&P 500 eases, ends longest winning run in 8 years > TREASURIES Prices ease as durable orders rise, supply looms > Yen nears 2-1/2 year low vs dollar, Aussie firmer > Gold near 2-1/2-week low as Fed meeting looms > LME copper up after promising US data; eyes Fed > Brent crude holds steady above $113 on positive U.S. data COMPANY NEWS SANDVIK The Swedish tool and equipment maker reported an adjusted operating profit of 3.06 billion Swedish crowns ($477.20 million), missing the market's average forecast of 3.3 billion. TELIASONERA A British court will decide this week whether Turkish tycoon Mehmet Emin Karamehmet's company Cukurova can keep control of operator Turkcell, of which TeliaSonera holds 37 percent, in a dispute with Russian billionaire Mikhail Fridman's Altimo. The dispute centers around a loan by British Virgin Islands-based Cukurova from Altimo. It has left Turkcell unable for years to agree on the composition of its board, to distribute dividends or to pursue a coherent growth strategy. ALLIANZ Allianz and HSBC signed a 10-year distribution agreement that will see HSBC selling Allianz life and pension products in Turkey and possibly other European countries, Allianz said, adding it will pay HSBC 23 million euros to be the exclusive provider of the products in Turkey. Related news DAIMLER Daimler Trucks plans to increase Truck sales in 2013, chief Andreas Renschler said. Daimler, Ford and Nissan also plan to develop and launch affordable fuel-cell vehicles within five years. Related news: DEUTSCHE BANK Deutsche Bank and Thailand's TISCO Securities Co Ltd said on Tuesday they had formed a joint venture in Bangkok to offer equity research and advisory services in Thailand. Related news DEUTSCHE BOERSE German lawmakers have delayed making a decision on changes to a draft law to clamp down on high-frequency trading in shares and other financial instruments due to the issue's complexity, a source from Chancellor Angela Merkel's party said on Monday. Separately, IntercontinentalExchange Inc has received inquiries from rivals interested in buying NYSE Euronext's European stock exchanges, ICE's chief executive said on Monday. Related news BANCA MONTE PASCHI DI SIENA The troubled bank said on Monday it had no evidence of bribery in a 2007 takeover now under scrutiny over alleged corruption but acknowledged accounting irregularities over derivatives deals under previous management. The loss-making trades at the centre of a scandal at Monte Paschi were only uncovered when new executives unlocked a safe at the bank's historic headquarters in Tuscany. INTESA SANPAOLO CEO Tommaso Cucchiani told Corriere della Sera the Monte Paschi scandal was an isolated case and that he saw not risk of contagion for the Italian banking system. In an interview, he said there would be "systemic risk" if state help was blocked. UBS A federal judge on Monday authorized the Internal Revenue Service to seek records from UBS AG of U.S. taxpayers suspected of hiding their income in accounts with Swiss bank Wegelin. REPSOL Repsol will likely approve on Wednesday the sale of liquified natural gas assets to Shell, reported newspaper Cinco Dias, citing sources close to the deal. TELEFONICA Spain's Telefonica has asked its banks to extend the maturity of 1.25 billion euros ($1.7 billion) of an existing 2 billion euro loan that expires in July 2016, banking sources told Thomson Reuters syndicated loans news service RLPC on Monday. IBERDROLA Spanish lender Kutxabank said on Monday its stake in utility Iberdrola fell from 5 percent to 4.9 percent, after it opted to claim dividends in cash instead of in shares. Iberdrola's payment of scrip dividends in shares to other investors diluted Kutxabank's stake.
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