European Factors to Watch - Shares supported by cbank stimulus

Mon Feb 25, 2013 2:28am EST

LONDON, Feb 25 (Reuters) - European stocks were seen nudging higher at the
open on Monday, cheered by signs that the United States and Japan will continue
with ultra easy monetary policy for some time yet, but uncertainty surrounding
the Italian elections was expected to keep a lid on market gains.
    Federal Reserve officials late on Friday highlighted the merits of the U.S.
central bank's bond-buying programme, reassuring investors that stimulus is not
about to be removed and helping Wall Street post solid gains. 
    Asian shares also rose overnight after sources said Japan is likely to
nominate a proponent of aggressive monetary easing as its next central bank
governor, sending Tokyo's benchmark Nikkei 225 share index to 4-1/2 year highs
. 
    "We still think we are in a pretty condusive environment for equities," said
Ian Richards, head of equity strategy at Exane BNP Paribas.
    "We think it's a bit early to be too early to be too worried about the end
of QE (quantitative easing)," he added, noting that the equities market was in a
sweetspot of ample central bank liquidity, signs of some global economic
improvement and not overly challenging valuations.    
    At 0726 GMT, futures for Euro STOXX 50 were up 0.7 percent,
following on from strong gains in the euro zone's blue-chip index on Friday.
 
    Futures for Germany's DAX and for France's CAC each added
around 0.5 percent, while those for FTSE 100 lagged slightly with a 0.3 percent
gain following Moody's downgrade on Britain's sovereign credit rating at
the end of last week. 
    Faced with a relatively light corporate and data calendar, investors were
expected to focus on the uncertain outcome of the Italian elections, where
voting finishes later on Monday. 
    "The focus this week should be on the political front and there could be
significant downside risks ahead," analyst at Credit Agricole said in a note.
    "A clear victory of the centre-left coalition (in Italy) ... would likely be
the most market-friendly outcome. On the other hand, a hung parliament or
another situation leading to political instability and a slowdown in the reform
momentum would likely lead to a widening in sovereign spreads as well as
negative implications for business confidence and the economy." 
     Investor sentiment was also likely to be dampened by news that the pace of
growth in China's manufacturing sector pulled back from a five-year high this
month, according to the HSBC's purchasing manager's index, hit by stagnant
exports. 
   
--------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0722 GMT: 
                                         LAST     PCT CHG    NET CHG
 S&P 500                             1,515.60      0.88 %      13.18
 NIKKEI                             11,662.52      2.43 %     276.58
 MSCI ASIA EX-JP                       553.35     -0.08 %      -0.42
 EUR/USD                                1.322      0.27 %     0.0035
 USD/JPY                                94.24      0.92 %     0.8600
 10-YR US TSY YLD                       1.976          --       0.01
 10-YR BUND YLD                         1.574          --       0.01
 SPOT GOLD                          $1,585.31      0.32 %      $5.01
 US CRUDE                              $93.17      0.04 %       0.04
 
  > GLOBAL MARKETS-Asian shares edge higher, yen falls on BOJ report 
  > Nikkei soars to 4-1/2-yr high; Kuroda seen likely next BOJ governor 
  > HP lifts Wall St but S&P posts year's first down week 
  > TREASURIES-U.S. bond prices firm before Bernanke's testimony 
  > FOREX-Yen & sterling slump, euro eyes Italy elections 
  > PRECIOUS-Gold bounces on physical buying, off 7-mth low 
  > METALS-London copper snaps 6 days of losses, but China weighs 
  > Brent slips below $114 as China factory output retreats from 2-yr high 
    
    * SIEMENS, NOKIA : The German industrial bellwether
Siemens will speed up efforts to exit or cut its 50 percent stake in its telecom
equipment joint venture with the Finnish phone maker, the Financial Times
reported on Sunday. 
    * RBS - The British state-backed lender is set to signal this week
that it plans a partial sale of its U.S. bank Citizens this year or next, a
source close to the matter said. 
    * VIVENDI - The French media group is likely to close a deal in the
coming weeks to sell a stake in Brazilian telecoms unit GVT, after getting the
government's nod to close a deal with DirecTV or a group of funds led by
KKR & Co, newspaper Folha de S.Paulo reported. 
    * ASSOCIATED BRITISH FOODS  - The firm forecast first half results
ahead of its expectations at the start of the year, driven by the performance of
its Primark discount fashion chain. 
    * CREDIT SUISSE - The U.S. Attorney's Office in New Jersey is
investigating the Swiss-lised bank over mortgage-backed securities packaged and
sold by the bank, according to people familiar with the matter. 
    * POSTNL - The Dutch firm says fourth quarter net profit was 155
million euros versus Reuters poll average of 82.4 million. 
    * MARKS AND SPENCER - The retailer failed to pull in new year sales
shoppers, with reports suggesting it lost ground to rivals Primark and Zara, The
Independent reports.
    * RAIFFEISEN BANK - The Austrian lender may have to write down
more assets, its CEO said in a newspaper interview.
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