European Factors to Watch-Market seen consolidating strong gains

Wed Feb 20, 2013 2:35am EST

LONDON, Feb 20 (Reuters) - European stocks are set to open broadly flat on
Wednesday, consolidating the previous session's strong gains as investors digest
a bumper crop of results and economic data to gauge the sustainability of the
rally.
    At 0726 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC and Britain's FTSE 100 were all steady.
    Europe's bourses finished higher on Tuesday, with the broad FTSEurofirst 300
index closing up 1.1 percent at 1,171.73 points - its best finish in three weeks
 - thanks to forecast-beating German data. 
    The upbeat investor sentiment continued overnight with Wall Street closing
in on record highs and Asian shares hitting 18-month highs
. 
    However, Europe's heavyweight energy stocks could suffer from a retreat in
oil prices after industry sources said Saudi Arabia expects to raise output in
the second quarter. 
    Analysts also say that for the market gains to be sustained in the longer
term, economic data and corporate earnings need to catch up with the relatively
upbeat investor sentiment. Tuesday's strong German ZEW investor sentiment index
aside, so far there are few convincing signs of this happening, and the
relatively subdued market volumes also underscore caution.
    "When you are making daily highs and the volume is incredibly thin, what is
driving this market? It doesn't look like it's conviction," said Ioan Smith,
strategist at Knight Capital.
    "People may not be necessarily selling cash (equity) holdings, but it
certainly looks like some people at these levels are looking to take on
protection."
    Investors snapped up around 40 percent more put options - which offer
protection in case of a market fall - than upside call bets on the Euro STOXX 50
 for March and April maturities on Tuesday, and twice as many for
December, according to data from the Eurex exchange.
    To date, with around a third of STOXX Europe 600 companies having
reported full-year results, 40 percent have missed on earnings, prompting
analysts to downgrade 2013 forecasts by 2.3 percent, according to Thomson
Reuters StarMine.
    Wednesday's crop of results yet again highlighted the importance of looking
outside stagnant Europe for profit growth, with hotelier Accor among
the beneficiaries. In contrast, French bank Credit Agricole slipped
even deeper into the red than expected.
    The data calendar is also relatively heavy, including numbers on UK
unemployment and U.S. housing starts.
--------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0726 GMT: 
                                    LAST       PCT CHG  NET CHG  
 S&P 500                            1,530.94   0.73 %   11.15    
 NIKKEI                             11,468.28  0.84 %   95.94    
 MSCI ASIA EX-JP                    561.32     1.04 %   5.76     
 EUR/USD                            1.3423     0.27 %   0.0036   
 USD/JPY                            93.24      -0.34 %  -0.3200  
 10-YR US TSY YLD                   2.026      --       0.00     
 10-YR BUND YLD                     1.644      --       0.02     
 SPOT GOLD                          $1,606.54  0.15 %   $2.33    
 US CRUDE                           $96.71     0.05 %   0.05     
 
  > GLOBAL MARKETS-Asian shares hit 18-month high on growth hopes 
  > US STOCKS-M&A deals lift Wall Street shares nearer a record high 
  > Nikkei hits 52-month high, but Japan Tobacco weighs 
  > TREASURIES-U.S. bond prices fall as stock gains pare bids 
  > FOREX-Yen edges up vs dollar; kiwi slides on RBNZ comments 
  > PRECIOUS-Gold hovers around 6-mth lows, economic recovery hopes weigh 
  > METALS-London copper bounces from 3-week low on rising risk appetite 
  > Brent slips toward $117 as Saudi to raise crude output    
    
    * BHP BILLITON  : The miner appointed the head of its
non-ferrous business as its CEO. The appointment came as BHP reported a 43
percent slump in first-half profit to $5.68 billion and took $3 billion in
writedowns on its aluminium and nickel assets, in line with market forecasts.
 
  
    * LAFARGE : The world's largest cement maker, said on Wednesday it
swung back to profit in the fourth quarter and said it secured close to 900
million euros ($1.2 billion) worth of divestments in 2012.  

    * UNICREDIT : Italy's biggest bank by assets plans to close an
extra 350 branches - or nearly 10 percent of its network - by 2015.
 
    
    * FERROVIAL : The Spanish infrastructure firm posted
better-than-expected 2012 results as lucrative assets like Heathrow airport and
toll roads in Canada compensated for its sluggish home market. 
    
    * ACCOR : Europe's largest hotelier said it would hike its 2012
dividend by 17 percent on the back of higher operating profits, as robust
emerging markets made up for a more difficult economic climate in Europe.
 
    
    * AKZO NOBEL : The Dutch paints and chemicals group reported
fourth-quarter quarterly earnings before interest, tax and depreciation (EBITDA)
of 363 million euros, slightly up from a year ago and ahead of analyst
forecasts. The firm also unveiled new targets for coming years. 
    
    * CREDIT AGRICOLE : The French bank posted a 6.5 billion-euro
full-year loss as taxes on the sale of its Greek unit pushed the bank even
deeper into the red than expected. 
    
    * FRANCE TELECOM :  The operator's revenue in the fourth quarter
fell 3.2 percent to 10.92 billion euros on a comparable basis, hit by weakness
in France and Poland. 
    
    * KABEL DEUTSCHLAND : The group, a possible takeover target for
Vodafone, said it would hike dividend to 2.50 euros per share for the
year ending in June after posting broadly in-line results. 
    
    * DSM : The Dutch food and chemicals group reported slightly
weaker-than-expected fourth quarter results and said it was on track to achieve
its 2013 earnings target of 1.4 billion euros. 
    
    * DEUTSCHE LUFTHANSA : Germany's biggest airline posted a net
profit of 990 million euros in 2012, boosted by the one-off sale of equity
investments, and said it planned to suspend its dividend payment and fully
retain its net profit as it bolsters restructuring. 
        
     * TF1 : France's second-biggest private broadcaster said sales
would slip by 3 percent this year as big advertisers cut spending.
 Rival M6 posted an 11 percent drop in full-year
operating profit
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