Europe Factors to Watch-Shares set to bounce after sell-off

Fri May 24, 2013 2:34am EDT

PARIS, May 24 (Reuters) - European stocks are set to bounce
back on Friday as bargain hunters move in following the market's
biggest one-day drop in nearly a year, betting that the sharp
five-week rally fuelled by central bank liquidity will soon
resume.
    At 0628 GMT, futures for Euro STOXX 50, for UK's
FTSE 100, for Germany's DAX and for France's CAC
 were up 0.1-0.4 percent.
    European stocks sank on Thursday, with the FTSEurofirst 300
 index losing 2.1 percent as concerns the U.S. Federal
Reserve could soon start to reduce its stimulus measures sparked
a bout of profit-taking in equities worldwide.
    Seeking to temper the worries, St. Louis Fed President James
Bullard said on Thursday that he did not think the Fed was "that
close" to taking any such decision. 
    "The market was ripe for a pull-back, it was just a matter
of getting a trigger for it. Very few investors have been
hedging their long positions lately, so yesterday's drop
triggered stop losses across the board," a Paris-based trader
said.
    "But with so many investors still on the sidelines, we
should get a 'buy the dip' rebound today or in the coming days."
    U.S. shares slipped on Thursday but ended sharply off
their session's lows, while Japan's Nikkei share average 
rose on Friday, rebounding from the previous day's 7.3 percent
plunge which has prompted some investors to scale back their
exposure to Japanese stocks.  
    "The selling pressure we are witnessing is not a reflection
of changed fundamentals but a liquidity issue," Ian Richards,
global head of equities strategy at Exane BNP Paribas, said in a
note.
    "The most obvious challenge to the positive, liquidity
induced trend in markets this year will come when the Fed decide
to lower the level of stimulus. This looks unlikely until the
autumn. In turn this suggests the near-term balance of risks
facing equity investors remains favourable."
    Investors will keep an eye on Germany's Ifo business climate
index, due at 0800 GMT, likely to shed light on the outlook for
Europe's biggest economy.
    Data showed on Friday that private consumption helped
Germany eke out meager economic growth of 0.1 percent in the
first quarter of the year, compensating for declines in exports
and investment. 
      
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  MARKET SNAPSHOT AT 0628 GMT: 
                                                        
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,650.51  -0.29 %    -4.84
 NIKKEI                             14,612.45   0.89 %   128.47
 MSCI ASIA EX-JP                       548.52   0.12 %     0.64
 EUR/USD                               1.2936   0.01 %   0.0001
 USD/JPY                               101.62  -0.38 %  -0.3900
 10-YR US TSY YLD                       2.002       --    -0.01
 10-YR BUND YLD                         1.429       --    -0.01
 SPOT GOLD                          $1,389.91  -0.06 %   -$0.79
 US CRUDE                              $93.90  -0.37 %    -0.35
 
  > GLOBAL MARKETS-Asian stocks shaky, Nikkei still seen
vulnerable 
  > US STOCKS-Wall St sags, but ends off session lows; HP hits
52-wk high 
  > Nikkei rises 0.9 pct in turbulent session after Thursday's
plunge 
  > Dollar falls more than one yen from day's high 
  > PRECIOUS-Gold climbs as Fed official says no rush to end
bond buying 
  > METALS-Copper rises but China woes dim demand outlook
 
  > Oil prices set for biggest weekly loss in five 
    
    COMPANY NEWS:
    
    TELECOM ITALIA 
    Telecom Italia has pushed to the end of the month a decision
on whether to spin off its fixed-line access network, which is
proving more complex than expected due to political and
regulatory considerations. 
    
    NOVO NORDISK 
    The world's biggest insulin producer said late on Thursday
that Phase III study results had shown people treated with its
liraglutide drug had an 8 percent weight loss. 
    
    SMITHS GROUP 
    In the nine months to 4 May 2013, Smiths Group grew
underlying revenue across all divisions. Underlying headline
operating profit was also ahead of the same period last year.
Expectations for the year remain in line with the outlook given
at the interim results in March. 
    
    HSBC 
    HSBC's controversial $1.9 billion settlement deal with the
U.S. authorities over money laundering charges has stalled after
a row between the justice department and the judge overseeing
the case, The Guardian reports. 
    
    BANKIA 
    Small investors in shares of in Spain's nationalised lender
Bankia suffered new massive losses on Thursday as the stock
plunged by more than 50 percent amid an abnormally high volume
of trading which the stock market regulator said would be looked
at closely. 
    
    CREDIT SUISSE 
    Credit Suisse Group CSGN.VX has named Jeff Douthit as new
co-head of its investment banking department in Chicago,
according to an internal memo to staff that was reviewed by
Reuters. 
    
    VOLKSWAGEN 
    The head of Volkswagen's works council, Bernd Osterloh, said
ahead of the second round of wage negotiations at the carmaker
that the wage agreement at VW should be better than the
industry-wide agreement, German paper Handelsblatt reported.
 
    
    SOLARWORLD 
    The European Commission rejected Chinese trade association
statements that talks to resolve a dispute over allegations of
dumping of solar panels had broken down, while Chinese comments
highlighted risks the dispute could escalate.
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