Europe Factors to Watch-Shares set to track Wall Street rally
PARIS, March 27 (Reuters) - European stocks are set to rise on Wednesday, extending the previous session's gains and tracking a rally on Wall Street, where robust data on home prices and manufacturing fuelled optimism about the pace of the economic recovery. At 0720 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were up 0.3-0.5 percent. The Dow Jones industrial average hit a fresh record close while the S&P 500 rose to just below its all-time closing high, after data showed U.S. single-family home prices rose in January at the fastest pace in more than six years, while long-lasting U.S. manufactured goods, also known as durable goods orders, surged in February. Gains could be limited in Europe, however, as Cyprus was still in focus on Wednesday, as the country is expected to complete capital control measures to prevent a run on the banks by depositors anxious about their savings following a controversial bailout package with international lenders. Cypriot banks are due to reopen on Thursday. European stocks dropped last week as the initial plan to rescue Cyprus involving a levy on all bank deposits sparked fears of bank runs in the euro zone's most indebted countries. "The Cyprus crisis has been a strong reminder that the euro zone is not out of the woods yet, and it has removed some of the complacency seen earlier this year, which is a good thing," a Paris-based trader said. "Investors have to do their homeworks now, picking the stocks with the biggest exposure to the U.S. recovery for instance, and avoiding pure euro zone domestic names, even if they look cheap." Italy - still without a government following last month's inconclusive election - will also be in the spotlight on Wednesday as the country is set to sell up to 7 billion euros ($9.00 billion) of 5-year and 10-year bonds, with investors seeking insight on the impact on demand for peripheral euro zone debt following the escalation of Cyprus's debt crisis. Late on Tuesday, the International Monetary Fund released a report saying Italy's banking sector is well capitalised but still faces risks because of a prolonged recession and exposure to sovereign debt, recommending measures such as higher loan loss provisions. European equities have strongly recovered since mid-2012 - with the Euro STOXX 50 surging about 30 percent - propelled by the European Central Bank's pledge to safeguard the euro, which eased worries of a break-up of the region's currency bloc. The rally stalled last month, however, as the return of concerns over political risks in the euro zone, such as the political impasse in Italy, a corruption scandal in Spain and Cyprus's mounting debt crisis, prompted investors to move to the sidelines. ------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0721 GMT LAST PCT CHG NET CHG S&P 500 1,563.77 0.78 % 12.08 NIKKEI 12,493.79 0.18 % 22.17 MSCI ASIA EX-JP 544.20 0.63 % 3.42 EUR/USD 1.2848 -0.09 % -0.0012 USD/JPY 94.76 0.37 % 0.3500 10-YR US TSY YLD 1.911 -- 0.00 10-YR BUND YLD 1.335 -- -0.01 SPOT GOLD $1,594.46 -0.26 % -$4.13 US CRUDE $96.09 -0.26 % -0.25 > GLOBAL MARKETS-Asian shares boosted by U.S. recovery momentum > Data lifts Dow to a record, S&P near record close > Nikkei flat in choppy trade; ex-factor drags > TREASURIES-Bonds firm in Asia on Cyprus worries, soft consumer data > FOREX-Euro sulks near 4-month low, yen nudged down by BOJ hopes > PRECIOUS-Gold holds near $1,600, upbeat US data dents appeal > METALS-LME copper edges up after strong US data > Brent steady above $109, robust U.S. data supports COMPANY NEWS: ITALIAN BANKS Italy's banking sector is well capitalised but still faces risks because of a prolonged recession and exposure to sovereign debt, the International Monetary Fund (IMF) said on Tuesday. DEUTSCHE TELEKOM John Legere, the chief executive T-Mobile USA, said he expects shareholders to approve the company's plan to merge with MetroPCS Communications Inc. AKER SOLUTIONS The oil services firm signed two major deals with Petrobras to deliver subsea equipment in the Santos Basin, 300 kilometres offshore Brazil, it said on Wednesday. CREDIT SUISSE The bank said on Wednesday it will buy Morgan Stanley's wealth management arm in Europe, the Middle East and Africa for an undisclosed price. ENEL, ENDESA, ENEL GREEN POWER The utility is interested in a 10-20 percent share in the Trans Adriatic Pipeline (TAP) project that would carry gas from the Caspian region to Italy through Greece and Albania, Enel's chief executive officer said on Tuesday. Fulvio Conti also said Enel will not sell assets of its Spanish unit Endesa or a stake in its renewable unit Enel Green Power as part of its disposal plans. AXA U.S. insurer Protective Life Insurance is the leading candidate to buy some of AXA SA's U.S. life insurance assets in a deal that could be valued at around $1 billion, according to two people familiar with the situation. MEDIASET Italy's largest commercial broadcaster posted on Tuesday a 2012 net loss of 287 million euros ($369 million), against a profit of 225 million euros in 2011, hit by write-downs on sports rights as well as restructuring costs. SAFRAN France said it was launching the sale of a 3.12 percent stake in the aerospace group and would use the proceeds to fund investments to bolster the economy. ALLIANZ Germany's Allianz said on Wednesday it agreed to buy insurance business Yapi Kredi Sigorta from Turkish lender Yapi Kredi Bank. LVMH Louis Vuitton, the world's biggest luxury brand by sales, has put up the prices of its non-leather handbags in most markets since the beginning of the year, broker HSBC said in a note sent to clients. EADS, LAGARDERE Lagardere's chief executive reiterated that the group planned to sell its stake in EADS by the summer, Les Echos reported. A.P. MOLLER-MAERSK The Danish oil and shipping group A.P. Moller-Maersk's terminals unit lost its bid operate the Virginia Port Authority, according to Daily Press. The report said the Port Authority voted against privatising the state's ocean terminals, currently run by Virginia International Terminals.