European Factors to Watch-Shares to fall, focus on EU ministers

Fri Apr 12, 2013 2:50am EDT

LONDON, April 12 (Reuters) - European shares were set to retreat on Friday,
hit by caution over a meeting of EU finance ministers and on expectations of
some profit taking after four straight sessions of gains by equities to one-week
highs.
    The bailout package for Cyprus will top the agenda of an informal two-day
gathering in Dublin beginning on Friday, along with deepening problems in
Slovenia and growing German reluctance over euro zone banking reform.
    "There are a number of items on the agenda at this meeting, so there is a
good chance that there will be an impact on the markets," Alpari said in a note.
    Cyprus was originally meant to come up with 7 billion euros for the rescue
package and the European Union and International Monetary Fund would provide 10
billion, some documents show the total package will now cost 23 billion euros,
with Cyprus providing 13 billion. 
    A cautious tone was reflected in the futures market, with Euro STOXX 50
futures, Germany's DAX futures and France's CAC futures 
falling 0.4 to 0.7 percent. Financial spreadbetters earlier predicted Britain's
FTSE 100 to drop as much as 0.50 percent.
    The retreat is likely to come one day after the FTSEuroforst 300 index
 of top European shares rose 0.6 percent to a one-week high. The index
remained on track to post its best weekly gain since early January and is up
more than 5 percent so far this year.
    The market will keep a close eye on U.S. earnings, with investment bank
JPMorgan announcing results later in the session. Investors will
scrutinise its results for hints about the outflook for the financial sector.
    "We are currently net long financials with an 'overweight' on banks," Citi
said in a note, adding it saw improving capital, higher potential returns,
restructuring and regulatory forbearance as supporting a positive stance on the
sector.
    "We are broadly 'neutral' on cyclicals, have a positive skew to defensive
growth and are 'underweight' utilities, telecoms and oil & gas."
    Focus will also be on the euro zone's industrial production data at 0900
GMT, which are forecast to have risen 0.1 percent in February from a month ago.
In the United States, economists expect unchanged retail sales number for
February, due at 1230 GMT, against a 1.1 percent rise in the previous month.
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     MARKET SNAPSHOT AT 0643 GMT                                   
                                                  LAST    PCT CHG   NET CHG
     S&P 500                                  1,593.37     0.36 %      5.64
     NIKKEI                                  13,485.14    -0.47 %    -64.02
     MSCI ASIA EX-JP                            533.76    -0.66 %     -3.53
     EUR/USD                                    1.3098    -0.03 %   -0.0004
     USD/JPY                                     99.42    -0.25 %   -0.2500
     10-YR US TSY YLD                            1.784         --     -0.01
     10-YR BUND YLD                              1.291         --     -0.02
     SPOT GOLD                               $1,561.55     0.05 %     $0.81
     US CRUDE                                   $93.08    -0.46 %     -0.43
    * Asian shares shed some gains, dollar lingers near 100 yen  
    * Nikkei drops 0.8 pct, takes breather after rally           
    * Wall St gains for 4th day, but weak tech hurts Nasdaq      
    * Dollar hovers near 4-year high vs yen, aims at 100 mark    
    * Copper poised for weekly gain, underpinned by China demand 
    * Gold heads for third weekly drop, firm equities weigh      
    * Oil settles lower as demand view dims, inventory rises     
    * U.S. bond prices rise, though Japanese bids elusive        
    
    COMPANY NEWS
    DEUTSCHE TELEKOM 
    MetroPCS shareholders Paulson & Co and P. Schoenfeld Asset
Management LP (PSAM) both said on Thursday they were dropping their opposition
to a tie-up of the U.S. company with Deutsche Telekom's T-Mobile USA.
 
    
    D.E MASTER BLENDERS 1753 
    German investor Joh A Benckiser is close to making a formal bid for the
owner of Douwe Egberts coffee, a source close to the situation said, in a deal
valuing the Dutch firm at about 7.6 billion euros. 
    
    ALSTOM 
    Alstom Renewable Power and Brazil's Renova Energia said they signed an
initial contract worth around 450 million euros as part of a deal announced in
February to supply equipment to wind farms in Bahia State. 
     
    RIO TINTO 
    The global miner said on Thursday that it had suspended work at its Bingham
Canyon mine near Salt Lake City, Utah, after a land slide late on Wednesday.
 
    
    AGGREKO 
    The temporary power provider said trading in the first quarter had been in
line with its expectations with underlying group revenues growing by 8 percent,
while expectations for the year remain unchanged. 
    
    SEGRO 
    The owner, asset manager and developer of modern warehousing, light
industrial and data centre properties, acquires prime warehouses in Warsaw for
43.2 million euros ($56.71 million) from AREA Property Partners and Apollo-Rida
Poland. 

    VOLKSWAGEN, MAN SE 
    MAN SE said it was setting aside 140 million euros ($184 million), hitting
its first-quarter operating profit, to cover possible risks related to a large
order to construct turnkey diesel power plants. 
    
    TELEFONICA DEUTSCHLAND 
    Spanish telecom operator Telefonica and Dutch group KPN 
are set to reopen talks over sharing their mobile networks in Germany, the
Financial Times reported on Thursday. 
    
    TALVIVAARA  
    Finnish pension insurance firm Ilmarinen cancelled its subscriptions to the
mining company's recent rights issue after a second waste water leak, raising
doubts over the company's recovery efforts.