CORRECTED-Europe Factors to Watch-Shares seen flat to lower

Thu Mar 28, 2013 5:22am EDT

(Corrects pre-market report, replacing 'Slovakia' with 'Slovenia' in 5th
paragraph)
    PARIS, March 28 (Reuters) - European stocks are seen flat to lower on
Thursday, as concerns about a potential run on Cyprus's banks, which are set to
reopen almost two weeks after being shut by the government, kept investors on
edge.
    At 0715 GMT, futures for the Euro STOXX 50, for the UK's FTSE 100
, for Germany's DAX and for France's CAC were flat to
down by 0.07 percent.
    Tight controls will be imposed on transactions by Cyprus's banks to limit
cash withdrawals to no more than 300 euros ($380) per day, ban the cashing of
cheques and bar businesses from transferring money abroad unless they can show
it is for imports. 
    "The market will be watching unenviably at the droves of individuals who
will be waiting in line to withdraw the small amount of cash they can to
basically survive in Cyprus," IG chief market strategist Chris Weston wrote in a
note.
    "One has to wonder about the longer-term implications on this tiny economy.
It can't be good, and we will go through this all again with Slovenia at some
stage given the 7 billion euros of bad loans - around 20 percent of GDP - on its
balance sheets."
    On Wednesday, investors shied away from Spanish and Italian bonds, with
sluggish demand at an Italian debt auction, and turned to low-risk German debt.
 
    Italian banks will be in the spotlight on Thursday, with Banca Monte dei
Paschi di Siena set to post a 2.5 billion euro loss as it books higher
bad debt provisions and losses on derivatives trades targeted by a fraud
investigation. 
    European stocks have sharply rallied since mid-2012 - with the Euro STOXX 50
 gaining about 30 percent - lifted by the European Central Bank's
pledge to safeguard the euro, which eased fears of a break-up of the region's
currency bloc.
    The rally lost steam recently, however, stalled by the return of jitters
about political risks in the euro zone, such as the political impasse in Italy
following last month's inconclusive election, a corruption scandal in Spain and
Cyprus's mounting debt crisis, which have prompted investors to book some gains
and move to the sidelines.
    The pull-back has been particularly sharp for banking stocks, with the euro
zone STOXX banking sector index down 21 percent since a peak in late
January, while the broad STOXX Europe 600 is down 2.2 percent from a
near five-year high hit earlier this month. 
        
-------------------------------------------------------------------------------
 MARKET SNAPSHOT AT 0715 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,562.85  -0.06 %    -0.92
 NIKKEI                             12,335.96  -1.26 %  -157.83
 MSCI ASIA EX-JP                       541.92  -0.41 %    -2.25
 EUR/USD                               1.2803   0.18 %   0.0023
 USD/JPY                                94.20  -0.24 %  -0.2300
 10-YR US TSY YLD                       1.851       --     0.01
 10-YR BUND YLD                         1.269       --    -0.01
 SPOT GOLD                          $1,604.06  -0.05 %   -$0.73
 US CRUDE                              $96.84   0.27 %     0.26
 
  > GLOBAL MARKETS-Asian shares sag, euro faint on euro zone worries 
  > US STOCKS-Wall St ends flat on late buying, Cyprus woes linger 
  > Tokyo's Nikkei share average closes down 1.26 pct 
  > TREASURIES-Yields near 3-week low on euro zone worries 
  > FOREX-Worries about Italy & Cyprus take toll on euro 
  > PRECIOUS-Gold holds above $1,600 as Cyprus fallout supports 
  > METALS-Copper up as traders close short positions ahead of holiday 
  > Brent above $109 on demand revival hopes, Europe caps 
    
    COMPANY NEWS:
    
    BANCA MONTE DEI PASCHI DI SIENA 
    The Italian lender is set to post a 2.5 billion euro loss as it books higher
bad debt provisions and losses on derivatives trades targeted by a fraud
investigation. 
    
    NOVARTIS 
    U.S. regulators on Wednesday approved a new multiple sclerosis drug made by
Biogen Idec Inc that is widely expected to become the No. 1 oral
treatment for the disease, with annual sales topping $3 billion. 
    
    SYNGENTA, BAYER 
    Syngenta and Bayer, top producers of the pesticides blamed for a sharp fall
in bee populations around the world, have proposed a plan to support bee health
in a bid to forestall a European ban of their products.
    
    DEUTSCHE TELEKOM 
    Hedge fund Paulson & Co, which owns a 9.9 percent stake in MetroPCS, said
the proposed transaction with Deutsche Telekom unit T-Mobile is a bad deal.
Paulson said it believes MetroPCS is worth more as a standalone company.
    
    RENAULT-NISSAN 
    Political friction between China and Japan delayed by one year Nissan Motor
Co's plan to get 10 percent market share in China, Renault-Nissan Chief
Executive Carlos Ghosn told Reuters Insider on the sidelines of the New York
auto show on Wednesday.
        
    DEUTSCHE BANK 
    Deutsche Bank lost a bid Wednesday to end a shareholder lawsuit accusing it
of misrepresenting the risk of packaging home loans into complex financial
products. U.S. District Judge Katherine Forrest in Manhattan denied a motion by
the German bank to dismiss the lawsuit, which seeks class action status on
behalf of investors accusing Deutsche Bank of scheming to maximize profits at
their expense.
    
    MAUREL ET PROM 
    The oil group reported a drop in 2012 profits compared with the previous
year, when it benefited from the disposal of several assets, and said it would
aim to reinforce cash generation and reserves in 2013. 
    
    WENDEL 
    The French investment company on Thursday said net profit in 2012 halved
from the previous year, hit by a write-down in the value of its stake in
building materials maker Saint-Gobain.
    
    ENI 
    Italian oil and gas group Eni is considering opening its business in Iraq to
investment by Chinese oil company CNPC after offering it a stake in its bumper
Mozambique gas field earlier this month, two sources said.
    
    SWISS RE 
    Swiss Re said on Thursday it has settled a dispute with Berkshire Hathaway
 over a life retrocession agreement concluded in 2010 and will receive a
$610 million payment from the company of U.S. investor Warren Buffet.
 
    
    BARRY CALLEBAUT 
    Swiss chocolate maker Barry Callebaut plans to issue $300 million in new
equity as well as a $600 million bond to refinance a bridge loan used to fund
its planned purchase of the Singaporean group Petra Foods's cocoa
business.
    
    VUELING, IAG 
    International Airlines Group on Wednesday raised its takeover offer for
Spanish budget airline Vueling by almost one third after the Barcelona-based
carrier rejected a previous bid.
    
    COMMERZBANK 
    Comdirect head Thorsten Reitmeyer told Handelsblatt newspaper he did not
expect Commerzbank to sell the online brokerage unit. "There is no discussion
about it," he said.
        
    DAIMLER 
    German carmaker Daimler expects to book a non-cash gain in the second
quarter after revaluing its 7.5 percent stake in aerospace group EADS to account
for a loss of influence.
    
    LAGARDERE 
    The head of the French media group's magazines and radio division said in an
interview with Le Figaro that the unit would continue to cut costs but would
stop short of cutting jobs. It expects a 5 percent drop in ad revenues this
year.
($1 = 0.7824 euros)

 (Reporting by Blaise Robinson; Editing by Sudip Kar-Gupta)