European Factors to Watch-Shares to open flat, focus on Fed

Wed Jan 30, 2013 2:43am EST

LONDON, Jan 30 (Reuters) - European shares were set for a steady open near
two-year highs on Wednesday, with "overbought" technical conditions prompting
investors to trade cautiously before the U.S. Federal Reserve's policy meeting
later in the day.
    The market will focus on the central bank's statement after a two-day
meeting for hints about any change in its stance on stimulus measures in the
wake of recent improvement in leading global macroeconomic indicators. 
    Latest data on Tuesday showed U.S. home prices rose in November, while
China's top think-tank raised its growth forecast for the world's second-biggest
economy.  
    Charts showed major stock indexes had become "overbought" and were
vulnerable to a pullback. The FTSEurofirst 300 index's 14-day relative
strength index (RSI) was at 71, while it was 69 for the euro zone's blue-chip
Euro STOXX 50.
    An RSI above 70 is considered as "overbought", which often results in a
retreat for stock indexes. A level below 30 is seen as "oversold."
    The FTSEurofirst 300 ended 0.4 percent higher at 1,177.79 points on Tuesday,
its highest close since February 2011, taking the rally off its June lows to
around 24 percent. The index is on track to post its best monthly performance
since July 2012.
    At 0737 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC were flat. Analysts said more earnings releases and
economic data in the coming days could determine the market's short-term
direction.
    Swedish banks Nordea and Swedbank both beat expectations
for quarterly operating earnings and raised on Wednesday their dividends. In the
United States, Amazon.com Inc shares hit a record on Tuesday after it
reported better-than-expected quarterly profit. 
    "Equity markets continue to be in good health and the picture continues to
be pretty bullish. And given the earnings reports, it is justified so far,"
Christian Stocker, equity strategist at UniCredit in Munich, said.
    "In the short-term, the market is ripe for a consolidation, but this should
rather be a shorter-term development."
    Thomson Reuters data showed that of the 174 companies in the S&P 500 
that have reported earnings this season, 68.4 percent have been above
expectations. In Europe, just 7 percent of firms on the STOXX Europe 600
 have so far reported results, but 67 percent of them have met or beaten
forecasts.
    Focus will be on U.S. data, with Automatic Data Processing (ADP) releasing
its January employment report at 1315 GMT, the Mortgage Bankers Association
releasing its weekly mortgage index for the week ended Jan. 25 at 1200 GMT and
the commerce department announcing the advance (first) estimate of Q4 gross
domestic product at 1330 GMT.
    
     MARKET SNAPSHOT AT 0739 GMT                               
                                             LAST     PCT CHG   NET CHG
     S&P 500                             1,507.84      0.51 %      7.66
     NIKKEI                             11,113.95      2.28 %    247.23
     MSCI ASIA EX-JP                       557.99      0.48 %      2.69
     EUR/USD                                1.351      0.14 %    0.0019
     USD/JPY                                90.96      0.25 %    0.2300
     10-YR US TSY YLD                       2.010          --      0.01
     10-YR BUND YLD                         1.706          --      0.01
     SPOT GOLD                          $1,667.64      0.25 %     $4.19
     US CRUDE                              $97.65      0.08 %      0.08
 ----------------------------------------------------------------------------
    * Asian shares gain on global recovery outlook, eyes Fed     
    * Nikkei hits new 32-month high on Softbank                  
    * Wall St advances as defensive stocks extend rally          
    * Euro steady near 14-mth high, focus on $1.35 resistance    
    * Brent holds above $114 on optimism on U.S. economy         
    * Gold fights to hold ground above key level, Fed in focus   
    * LME copper hits near 3-wk peak on global growth hopes      
    * Prices dip as investors seek to pay less at auctions       
    
    COMPANY NEWS
     
    NORDEA 
    The Nordic region's biggest bank by value posted better-than-expected
fourth-quarter operating profits and said it would aim to have flat costs.
 
     
    QIAGEN  
    Genetic testing specialist Qiagen NV exceeded expectations with a
13 percent rise in fourth-quarter net profit and the company said it expected
sales and profit growth in 2013 thanks to demand for automated diagnostics gear.
 
 
    SWEDBANK 
    Swedish banking group Swedbank posted a fourth-quarter operating profit that
topped forecasts and said it was raising its dividend payout ratio to 75
percent. 
    
    ROCHE 
    Swiss drugmaker Roche expects sales to hold up this year as strong
sales of its top three cancer medicine and improvements in productivity helped
it post an 11 percent rise in full-year earnings. 
    
    SANOFI 
    The U.S. Food and Drug Administration on Tuesday approved a drug made by the
French drugmaker and Isis Pharmaceuticals Inc designed to treat a rare
genetic disorder that causes dangerously high levels of bad LDL cholesterol.
 
    
    BP 
    A U.S. judge accepted an agreement by the oil company to plead guilty for
its role in the Deepwater Horizon disaster and pay a record $4 billion in
criminal penalties for the worst offshore oil spill in U.S. history, drawing a
line under federal suits against the firm but not civil or state cases.
 
    
    SAIPEM 
    The Italian oil service group said on Tuesday it had cut its 2012 guidance
after a review of the group's contracts and prospects. 
 
    BANCA MONTE DEI PASCHI DI SIENA 
    The bank's risk control unit and its internal audit committee had expressed
serious misgivings about the bank's finance department, now at the centre of a
scandal about shady structured finance trades, as far back as November 2009,
according to internal documents. 
    
    JOHNSON MATTHEY 
    Platinum refiner Johnson Matthey saw profits dip in the third
quarter because of lower sales of catalysts for vehicle exhaust systems in the
high-value diesel category in Europe and weaker demand in Japan.