European Factors to Watch-Shares to rise, gains seen capped

Tue Mar 26, 2013 3:39am EDT

LONDON, March 26 (Reuters) - European shares were likely to edge higher at
the open on Tuesday, with investors taking advantage of recent drops to buy
equities, although concerns that a strict bailout deal for Cyprus might set a
precedent for Europe could limit gains.
    At 0728 GMT, futures for Euro STOXX 50 rose 0.4 percent to 2,597
points, while Germany's DAX, France's CAC and Britain's FTSE 100
 were 0.2 to 0.4 percent higher.
    Charts for the Euro STOXX 50 futures showed the index remained in a
short-term trading range, with support seen at around 2,560-2,570 and a
resistance at around 2,680-2,690.
    "As this short-term trading market displays a slightly negative groundtone,
following Monday's intra-day comedown, a continuation of the ongoing technical
consolidation is on the agenda," Commerzbank wrote in a note.
    The FTSEurofirst 300 index fell 0.3 percent on Monday, led lower by
financial stocks, after the head of the Eurogroup of regional finance ministers
said the Cyprus deal could set a new template for the region. The index has
fallen in six of the past 7 sessions.
    "The market has found some support. But the poor quality of the relief rally
that we saw yesterday was a clear statement that people are not impressed with
the Cyprus deal," Mike van Dulken, head of research at Accendo Markets.
    "This could mean that in future, bail-ins could be a part of bail-outs,
which is scaring people given that we have potentially Spain and Italy waiting
in the wings with their own problems."
    Focus will remain on the banking sector, which fell 1.9 percent on
Monday on concerns about Cyprus, where banks will remain closed until Thursday,
and even then subject to capital controls to prevent a run on deposits.
 
    Investors will keep an eye on a U.S. data for hints about the near-term
direction. ICSC/Goldman Sachs release chain store sales data for the week ended
March 23 at 1145 GMT, durable goods numbers for February are due at 1230 GMT and
Redbook's weekly retail sales figures will be released at 1255 GMT.
       
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     MARKET SNAPSHOT AT 0734 GMT                                      
                                                  LAST       PCT CHG   NET CHG
     S&P 500                                  1,551.69       -0.33 %      -5.2
     NIKKEI                                  12,471.62        -0.6 %    -74.84
     MSCI ASIA EX-JP                            541.11        0.43 %      2.34
     EUR/USD                                    1.2882        0.24 %    0.0031
     USD/JPY                                     94.37        0.23 %    0.2200
     10-YR US TSY YLD                            1.927            --      0.01
     10-YR BUND YLD                              1.345            --      0.01
     SPOT GOLD                               $1,602.35       -0.16 %    -$2.55
     US CRUDE                                   $95.11        0.32 %      0.30
 
    * Asian shares, euro spooked by Cyprus bailout details       
    * Nikkei falls on Cyprus bailout concern                     
    * Wall St ends lower on renewed Cyprus worries               
    * London copper cuts gains as technical buying fades         
    * Gold inches down, but euro zone worries cushion drop       
    * Euro hovers near 4-month low as Cyprus deal stings         
    * Brent slips towards $108 on worries over Cyprus            
    * Prices gain as Cyprus comments spark worry over banks      
    
    COMPANY NEWS
 
    BNP PARIBAS 
    The French bank's Belgian arm plans to save an annual 300 million euros over
the next three years by cutting its workforce by about 10 percent and closing
150 branches. 
    
    KAZAKHMYS 
    Kazakh copper miner Kazakhmys has taken a bigger than expected $2.22 billion
impairment on the value of its 26 percent stake in London-listed rival ENRC
. 
    
    ROYAL DUTCH SHELL 
    The Chinese government has approved a production-sharing contract with Royal
Dutch Shell for the Fushun shale gas block in southwest China's Sichuan
province, the company said on Tuesday. 
    
    KINGFISHER 
    Kingfisher, Europe's largest home improvements retailer, met forecasts with
an 11.4 percent fall in year profit that reflected weather-hit sales, tough
consumer markets and unfavourable foreign exchange movements. 
   
    STMICROELECTRONICS 
    The semiconductor company said on Tuesday it had signed a new 350 million
euro ($451 million) loan agreement with the European Investment Bank to fund R&D
investments in power, sensors and healthcare applications. 
 
    LUFTHANSA 
    The German airline is willing to accept more strikes if necessary, including
the participation of its pilots, to get the flexibility it needs, Chief
Financial Officer Simone Menne told reporters in New York. 
 
    TELEFONICA 
    Spain's Telefonica said on Monday it had mandated Goldman Sachs to sell all
its treasury stock, equivalent to 2 percent of the company's capital, as it
pushes to slash its debt.
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