European Factors to Watch-Strong China data seen helping shares

Wed May 8, 2013 2:28am EDT

LONDON, May 8 (Reuters) - European shares were expected to extend gains on
Wednesday, with strong Chinese trade data boosting sentiment after the previous
session's positive German industrial orders and record highs for U.S. and German
stocks.
    China's exports rose 14.7 percent in April, while imports grew 16.8 percent,
leaving the country with a trade surplus of $18.16 billion for the month. The
figures came in better than expected, easing concerns about the pace of recovery
of the world's second biggest economy. 
    "The most encouraging thing here was the substantial improvement in both
imports and exports, with both once again coming in well above expectations and
easily beating March's figures. If we continue to see these kinds of figures,
the recent concerns over a slowdown in China will appear a little premature,"
Craig Erlam, market analyst at Alpari, said in a note.
    At 0625 GMT, futures for Euro STOXX 50, UK's FTSE 100,
Germany's DAX and France's CAC were flat to 0.2 percent higher.
    The pan-European FTSEurofirst 300 index ended 0.3 percent higher at
1,220.94 points in the previous session after hitting a five-year high, while
Germany's DAX and the U.S. S&P 500 index climbed to record
highs.
    Recent encouraging macroeconomic data, including Friday's upbeat U.S. jobs
numbers, and accommodative monetary policies from the Federal Reserve and the
European Central Bank have raised the allure of equities compared to other asset
classes.
    Investors kept a close eye on corporate earnings for hints about the
market's near-term direction. According to Thomson Reuters StarMine data, about
70 percent of the STOXX Europe 600 companies have announced results so
far, of which nearly half have met or beaten predictions.
    "Company results have also been helping sentiment as investors have been
drawn in by headline numbers and poor rates of return elsewhere," Tom Robertson,
senior trader at Accendo Markets, said.
    "We have clawed back losses from March lows, which may have been the
correction people were calling for," he said, but added that investors might be
eager to take profits after the interest rate cut from the European Central Bank
and better than expected U.S. jobs data.
    Standard Chartered said on Wednesday its first quarter overall
income would be slightly higher compared to a year earlier. However, its
operating profit was likely to be slightly lower as an increase in hiring, and
wages, pushed up costs. 
    E.ON, Germany's top utility, said core earnings fell 5 percent in
the first quarter on weak energy consumption and low electricity prices in its
main market Europe. But Henkel said it had increased first-quarter
operating profit by 9 percent in spite of a tough economic backdrop.
          
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     MARKET SNAPSHOT AT 0626 GMT                                  
                                                 LAST    PCT CHG   NET CHG
     S&P 500                                 1,625.96     0.52 %      8.46
     NIKKEI                                 14,285.69     0.74 %    105.45
     MSCI ASIA EX-JP                           562.70      0.7 %      3.91
     EUR/USD                                   1.3106     0.22 %    0.0029
     USD/JPY                                    98.89    -0.11 %   -0.1100
     10-YR US TSY YLD                           1.781         --      0.00
     10-YR BUND YLD                             1.299         --      0.00
     SPOT GOLD                              $1,454.40     0.17 %     $2.41
     US CRUDE                                  $95.76     0.15 %      0.14
 
  > Asian shares rise on strong China trade data, record Wall St     
  > Dow ends above 15,000 for first time, S&P closes at record         
  > Nikkei scales fresh five-year highs, Sharp Corp jumps              
  > Prices dip, but stay range bound in new debt supply                
  > Aussie dollar off lows on upbeat China data; kiwi slides           
  > Gold extends losses; ETFs at 4-year low                            
  > London copper ticks up ahead of Chinese trade data                 
  > Brent holds above $104, pares losses on higher China crude imports 
    
    COMPANY NEWS
 
    STANDARD CHARTERED 
    Banking group Standard Chartered said on Wednesday its first quarter
operating profit was likely to be slightly lower than a year ago as an increase
in hiring, and wages, pushed up costs. 
    
    TELEFONICA 
    Telefonica, Europe's largest telecoms provider by revenue, reported a 9
percent drop year-on-year in first quarter revenues to 14.1 billion euros ($18.5
billion) on Wednesday, in line with analyst expectations. 
    
    RIO TINTO 
    Rio Tinto, the world's No. 2 iron ore miner, is keeping output expansion
plans for the steelmaking raw material intact, with global demand led by top
market China likely to keep growing, albeit at a slower pace, a senior company
official said. 
    
    BHP BILLITON 
    BHP Billiton, the world's No. 3 iron ore miner, expects growth in iron ore
seaborne supply to accelerate in the years ahead, leading to lower prices for
the steelmaking raw material, a senior company official said on Wednesday.
 
    
    HENKEL 
    The company said it had increased first-quarter operating profit by 9
percent in spite of a tough economic backdrop, as it pushed through higher
prices amid demand for its washing powders and shampoos. 
    
    CARLSBERG 
    The Danish brewer has up to 25 billion Danish crowns ($4.39 billion) for
acquisitions, daily Berlingske Tidende reported. The brewer told Berlingske a
gearing of 3.5 percent would not be a problem after the group has brought down
its debt to around 32.5 billion crowns, Berlingske said. 
    
    ING 
    Dutch banking and insurance group ING, which last week spun off its U.S.
insurance and investment unit, said on Wednesday it will push ahead with similar
plans for its European business next year. 
    
    HOLCIM 
    Swiss cement maker Holcim said cost savings and price hikes as
well as the sale of a stake in Cement Australia helped it offset weaker sales
volumes due to harsh winter weather to post an increase in first-quarter profit.
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    ACTELION 
    Actelion should continue a late-stage study into a new heart and
lung drug, independent monitors have recommmended, with final results now
expected by mid-2014, giving the biotech firm hope it has a further product in
its pipeline. For related news, click on 
    
    KLOECKNER & CO 
    German steel distributor Kloeckner & Co warned on Wednesday that it was
increasingly unlikely to reach its 2013 operating profit target as hopes for an
economic recovery later this year fade.
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