Europe Factors to Watch-Shares set to track Wall Street rally

Mon Feb 4, 2013 2:38am EST

PARIS, Feb 4 (Reuters) - European stocks are set to inch higher on Monday,
tracking sharp gains on Wall Street and in Asia after U.S. macro data showed the
world's biggest economy continues to recover.
    At 0730 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were flat to up by 0.2 percent.
    U.S. stocks surged to five-year highs on Friday, with the Dow Jones
industrial average closing above the 14,000 mark for the first time since
October 2007 while the Standard & Poor's 500 Index closed about 60 points
away from its all-time intraday high.
    Wall Street was boosted by a forecast-beating reading on the U.S.
manufacturing sector, as well as by upward revisions to the previous two months'
non-farm payrolls.
    This year's brisk rally in global equities has been supported by strong
inflows coming into the asset class, as fears over Europe's debt crisis ease and
the global economy recovers.
    According to EPFR Global, equity funds attracted another $18.7 billion
during the final week of January, fuelling talk of a long-awaited 'great
rotation' out of fixed income and into stocks.
    Europe equity funds continued to attract fresh money, with flows into Italy
funds hitting their highest weekly total since the financial crisis, EPFR said.
    On the fixed income side, Europe bond funds saw redemptions that largely
canceled out the year-to-date inflows, data showed. 
    "It may be that yields have dropped out of investors' comfort zone given the
risks that still go with Eurozone debt," Cameron Brandt, EPFR Global's Research
Director, wrote in a note. 
    Spain will be in the spotlight on Monday after the opposition Socialist
Party on Sunday called for the resignation of Prime Minister Mariano Rajoy over
a corruption scandal, as a poll showed the lowest support on record for his
centre-right People's Party. Media reports over the past two weeks alleged at
least a dozen senior PP officials, including Rajoy, received payments from a
slush fund operated by its former treasurer. 
    Shares in Spanish builders will also be in focus following a sharp sell-off
on Friday after the Spanish market regulator's decision to lift a ban on
short-selling. 
    The euro zone's blue chip Euro STOXX 50 index has climbed 2.8
percent so far this year, although the index's sharp rally lost steam last week
after hitting a 18-month high.
    "The index is poised to resume its rally following last week's
consolidation. Beyond that, it depends a lot on whether the S&P 500 will be able
to cross above its record high," Aurel BGC chartist Gerard Sagnier said.
       
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 MARKET SNAPSHOT AT 0732 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,513.17   1.01 %    15.06
 NIKKEI                             11,260.35   0.62 %    69.01
 MSCI ASIA EX-JP                       560.00   0.74 %     4.09
 EUR/USD                               1.3631  -0.07 %  -0.0009
 USD/JPY                                92.70  -0.02 %  -0.0200
 10-YR US TSY YLD                       2.036       --     0.01
 10-YR BUND YLD                         1.707       --     0.04
 SPOT GOLD                          $1,669.91    0.2 %    $3.37
 US CRUDE                              $97.47  -0.31 %    -0.30
 
  > GLOBAL MARKETS-Asian shares advance after US jobs, ISM 
  > Wall St surges to 5-year highs; Dow ends above 14,000 
  > Tokyo's Nikkei share average closes up 0.62 pct 
  > U.S. 10-yr yield hits 9-mth high after upbeat data 
  > Yen creeps up from 2 1-2/year low but seen vulnerable 
  > Gold crawls up but economic recovery hopes limit gains 
  > Copper at 4-mth peak as global growth outlook brightens 
  > Brent steadies above $116 on economy hopes, Middle East worries 
    
    COMPANY NEWS:
    
    MONTE DEI PASCHI DI SIENA 
    A plan by Italy's central bank to use bonds to bail out the troubled Monte
Paschi bank can go ahead, a court ruled on Saturday, as a scandal surrounding
the world's oldest lender looked likely to widen three weeks before a national
election. 

   DEUTSCHE TELEKOM, FRANCE TELECOM 
   Deutsche Telekom and France Telecom, owners of EE, Britain's biggest mobile
network, are close to appointing banks to advise on a flotation, The Sunday
Times reported, citing industry and banking sources. 
    
    SANOFI  
   Sanofi said on Monday regulators had approved Lyxumia, an injectable diabetes
treatment, for sale in Europe. 
    
    E.ON 
   Trade union Verdi said workers at Germany's top energy group have postponed a
strike planned from Monday Feb. 4, after a meeting with management late on
Friday. 
    
    SWATCH 
    Swatch Group, the world's biggest watchmaker, said it continued to see
healthy growth potential for the Swiss watch industry and its own business after
a good start to 2013.

    DAIMLER 
    Daimler's supervisory board will extend the contract of Chief Executive
Dieter Zetsche later this month by five years until the end of 2018, a source
familiar with the matter told Reuters. 
    
    AREVA 
    Niger wants to renegotiate the terms of its uranium mining partnership with
the French nuclear group to make it fairer for the African country, its
president told French channel TV5 Monde on Sunday. 
    
    VIVENDI  
    A tie-up between Numericable and the media-to-telecom conglomerate's French
telecom unit SFR would make sense in the competitive French telecom market,  the
head of the French cable operator said in an interview with French daily Le
Figaro. 

    RWE 
    RWE expects an out-of-court settlement with Russia's Gazprom in a
dispute over gas price contracts, in the first half of this year, its financial
chief told German newspaper Boersen-Zeitung. 
    
    EADS 
    EADS' nominations committee has shortlisted former European Central Bank
President Jean-Claude Trichet and Michel Pebereau, former chairman of French
lender BNP Paribas, to head its board, French daily Le Figaro reported
on its website on Sunday without citing sources. 
    
    TELE2  
    The Swedish telecom operator plans to sell its Swedish cable television unit
and a deal may be presented in the near future, business daily Dagens Industri
reported, citing a source.
    
    SPANISH CONSTRUCTION FIRMS 
   Abertis, Ferrovial and Itinere have offered to invest  3.34
billion euros in state highways in exchange for longer concessions or tariff
hikes, Cinco Dias reported, without naming sources.  
   Separately, Expansion said ACS, Acciona and FCC 
are the builders that won the most public works contracts in 2012.
    
    VEOLIA, EDF 
    The power company EDF and waste and water group Veolia
Environnement are close to reaching an agreement to cover the financing
of their Dalkia energy services venture, French daily Le Figaro reported on
Saturday without citing sources.