European Factors to Watch-Shares seen retreating from 5-yr high
LONDON, May 21 (Reuters) - European shares were likely to retreat on Tuesday, with concerns the U.S. Federal Reserve might begin slowing its bond purchases later in the year seen prompting investors to take profits from a rally to five year highs. Focus will be on Fed Chairman Ben Bernanke's testimony to Congress on Wednesday, after comments by Fed officials following recent strong data fuelled speculation the central bank might start to roll back its stimulus measures, which have helped the stock market to hit multi-year highs. Stock index futures pointed to a lower open, with futures for the Euro STOXX 50, UK's FTSE 100, Germany's DAX and France's CAC falling 0.1 to 0.2 percent. The FTSEurofirst 300 index ended 0.3 percent firmer at 1,252.09 points in the previous session, the highest in five years. The index has gained move than 10 percent this year on ample liquidity provided by central banks and recent encouraging data, especially from the United States. "The good news for those who remain bullish equities is that investors do appear to be moving away from defensive stocks and back into cyclical stocks, which suggests the rally is far from over," Craig Erlam, analyst at Alpari, said in a morning note. The euro zone's blue chip Euro STOXX 50 index ended 0.2 percent stronger at 2,824.50 points on Monday after hitting a near two-year high. Charts showed the index was technically "overbought", with its 14-day relative strength index (RSI) touching 70, but some analysts said the benchmark could add more gains as momentum remained positive. "Does the index look overbought? Absolutely, but the key oscillators are not displaying any sign of divergence," Bill McNamara, technical analyst at Charles Stanley, said. "Although a minor pull-back is possible at any stage now, there is little in the chart to suggest that a significant corrective phase is looming." Analysts said the index was expected to find support at around 2,750, its peak in March, while the next strong resistance was expected near 3,000, a high in 2011. On the macroeconomic front, focus will be on ICSC/Goldman Sachs data on chain store sales for the week ended May 18, due at 1145 GMT, and Redbook's Retail Sales Index of U.S. department and chain store sales for May, scheduled at 1255 GMT. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0619 GMT LAST PCT CHG NET CHG S&P 500 1,666.29 -0.07 % -1.18 NIKKEI 15,381.02 0.13 % 20.21 MSCI ASIA EX-JP 562.97 -0.09 % -0.48 EUR/USD 1.2893 0.09 % 0.0011 USD/JPY 102.55 0.28 % 0.2900 10-YR US TSY YLD 1.966 -- 0.00 10-YR BUND YLD 1.371 -- 0.00 SPOT GOLD $1,395.86 0.2 % $2.82 US CRUDE $96.69 -0.02 % -0.02 > Dollar firms as suspense builds, Asia shares dip > Wall St ends flat on correction worries > Nikkei hits 5-1/2-yr high as retail investors pick up bargains > Prices slip in choppy trading as investors await Fed > Dollar regains ground after Japan minister clarifies yen comments > Gold, silver fall as dollar gains; ETF holdings drop > Copper sits tight ahead of factory data; U.S. confidence supports > Brent holds near 2-week top at around $105 on supply worries COMPANY NEWS VODAFONE The world's second-largest mobile operator posted its largest ever quarterly fall in key organic service revenue, prompting it to keep hold of a dividend from its U.S. arm and reinvest it into the business and not return it to shareholders. The 4.2 percent fall in organic service revenue was in line with forecasts. MARKS & SPENCER The British retailer posted its lowest annual profit since 2009 as a struggling general merchandise division dragged on growth in food sales. With a profit before tax and one-off items of 665.2 million pounds, M&S still managed to beat consensus of 658 million pounds. BURBERRY British luxury group Burberry posted a 14 percent rise in full-year pretax profit and said profit for the first half of its new fiscal year would be below last year's as it reduces its wholesale business in favour of retail markets. BAYER Bayer said extended use of its experimental riociguat pill to treat a life-threatening form of high blood pressure in the lungs was shown to be safe and effective in a prolonged trial. SONOVA The world's largest hearing aid maker said full-year operating profit fell 42 percent, hit by a provision for potential claims against faulty cochlear implants at its subsidiary Advanced Bionics. ROCHE Regeneron Pharmaceuticals Inc said it settled all pending litigation with Roche Holding AG's unit Genentech on the company's eye drug, Eylea, and cancer drug, Zaltrap. ATLANTIA The motorway operator is close to selling its transmission towers to U.S. investors for almost 100 million euros, a source close to the matter said on Monday. TELECOM ITALIA Franco Bernabe, the chairman of Telecom Italia, met Italian Prime Minister Enrico Letta on Monday to discuss plans to spin off the group's domestic fixed-line network, a source familiar with the situation said late on Monday. DANONE France's Danone is aiming for a bigger slice of one of the world's fastest-growing dairy markets by investing 325 million euros ($417 million) in two deals with China Mengniu Dairy Co Ltd. NATIXIS French financial markets regulator AMF has opened an inquiry into an ownership overhaul at French bank Natixis, French daily Les Echos said on Tuesday.
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