European Factors to Watch-Shares seen up after steep sell-off

Fri Jun 21, 2013 2:54am EDT

LONDON, June 21 (Reuters) - European shares were expected to open higher on
Friday, with investors looking for value in some beaten-down stocks a day after
the market's biggest one-day drop in 19 months on the U.S. Federal Reserve's
plan to trim stimulus.
    At 0644 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC were 0.2 to 0.6 percent higher.
    The pan-European FTSEurofirst 300 index fell 3.1 percent to a
six-month low of 1,143.99 points on Thursday On disappointing Chinese
manufacturing data and after the Fed said late on Wednesday a stronger U.S.
economy meant it would look to scale back its hefty asset purchases this year.
    "Markets are bracing for the day that they no longer have steroid injections
to keep them going. Instead, fundamentals will become important to sustain gains
in risk assets," Credit Agricole said in a note.
    "(However) signs of firmer U.S. and Chinese growth and stabilisation in
Europe will eventually drag markets out of their turmoil."
    The euro zone's blue chip STOXX Europe 600 index, which fell 3
percent to 2,586.45 points on Thursday, has fallen below its 200-dau moving
average and is back into its near-term downtrend channel that was in place since
a high in late May. It also dropped below its one-year long uptrend line.
    However, the index is expected to find strong support at around 2,545, which
coincides with its 38.2-percent retracement of a rally since mid-2012 until late
May, and a low in March. Resistance is seen at 2,663 points, its 23.6 percent
retracement and around a 25-point gap left open between June 19 and June 20.
    "Even if the next few days bring a temporary closing of the gap left behind,
in view of the intact downward trend, the defensive stance towards the (Euro
STOXX 50) future is likely to be maintained," Commerzbank said in a note.
    Investors were expected to trade cautiously ahead of the expiry of monthly
and quarterly options and futures and on speculation that Greece's small
Democratic Left party could pull out of Prime Minister Antonis Samaras's ruling
coalition after talks to resume state television broadcasts collapsed.
 
    "At the moment, you would probably like to be more on the defensive side as
the market faces a lot of uncertainties," Keith Bowman, equity analyst at
Hargreaves Lansdown, said, adding that in cyclicals, he preferred airline stocks
due to their growth potential.
    Mining shares will be in focus after a sharp decline in key base metals
prices and after Societe Generale cut its price targets and earnings projectors
for several miners, following downward revisions to its commodity price
forecasts last week.
    
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     MARKET SNAPSHOT AT 0647 GMT                                 
                                                LAST    PCT CHG   NET CHG
     S&P 500                                1,588.19     -2.5 %    -40.74
     NIKKEI                                13,230.13     1.66 %    215.55
     MSCI ASIA EX-JP     <.MIASJ0000PUS       492.48    -0.92 %     -4.55
                         >                                       
     EUR/USD                                  1.3237     0.14 %    0.0019
     USD/JPY                                   97.72     0.46 %    0.4500
     10-YR US TSY YLD                          2.426         --      0.01
     10-YR BUND YLD                            1.688         --      0.02
     SPOT GOLD                             $1,300.16     1.75 %    $22.42
     US CRUDE                                 $95.60     0.48 %      0.46
 
  > Asian shares hit 9-mth lows on Fed, China rates ease            
  > Wall St plunges, S&P posts biggest drop since Nov 2011                 
  > Nikkei sags as Fed plan spurs global sell-off                          
  > U.S. bond market slides as Fed plans become clearer                  
  > Dollar steps back from 2-week high, emerging markets in focus        
  > Gold recovers as Chinese buyers emerge, stocks slump                 
  > Copper sinks to 20-month low on China growth fears, Fed             
  > Brent stays above $102, but set for biggest weekly drop in 2 months   

    COMPANY NEWS
 
    RIO TINTO 
    The miner's plan to start exporting copper from the $6.2 billion Oyu Tolgoi
mine has been delayed at the request of the Mongolian government, heightening
investor concerns about the risks of mining in the country. 
    
    ROYAL DUTCH SHELL The company aims to build the Philippines' first
liquefied natural gas (LNG) import terminal in the next two to three years, as
Asia's fastest-growing economy seeks to diversify its energy sources to meet
robust demand. 
    
    REPSOL 
    As part of the creation of Spain's new regulatory overseer, which places
competition, energy and telecommunication regulation under one roof, the
government has direct power to prevent hostile takeovers of strategic Spanish
assets, media reported on Friday citing the official government bulletin.
    
    TECHNIP 
    The oil services group said on Friday it had secured a contract by BP Zhuhai
Chemical, a joint venture between BP and Zhuhai Port, for a
new purified terephthalic acid in China. 
    
    SANOFI 
    The drugmaker's new bowel cancer treatment Zaltrap is not worth using on
Britain's state health service given its high price, the country's healthcare
cost watchdog said on Friday. 
    
    ALSTOM 
    Moody's cut the power and transport engineering group's rating to Baa3 on
Friday saying Alstom has not been able to achieve the ratings agency's
expectations for debt reduction. 
     
    NOVARTIS 
    The Swiss pharmaceuticals company said on Friday U.S. regulators have given
breakthrough therapy status to an investigational treatment for patients with
acute heart failure, potentially fast tracking its development and approval.
For related news, click on 
    
    GLAXOSMITHKLINE 
    The Daily Mail's market report cites "industry gossip" that Glaxo is lining
up a $55 per share bid for U.S. firm Theravance, in which it already
has a stake. 
    
    FNAC 
    Shares in books and music retailer Fnac closed down 13.6 percent
on their market debut on Thursday as investors offloaded the stock they received
from parent Kering. 
    
    ROLLS ROYCE 
    The company is selected by Philippine Airlines to deliver Trent 700 engines,
worth $1.4 billion at list prices.
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