European Factors to Watch-Shares seen higher, China in focus
LONDON, June 25 (Reuters) - European shares were set to trim recent steep losses on Tuesday, with investors seeking value in some battered stocks, although equities remained vulnerable due to concerns about U.S. stimulus and China's banking sector. At 0631 GMT, futures for Euro STOXX 50, UK's FTSE 100, Germany's DAX and France's CAC were 0.7 to 0.8 percent higher, indicating a firmer open after sharp declines in the previous sessions. The FTSEurofirst 300 has fallen more than 11 percent since a 5-1/2-year high in late May. It closed 1.6 percent lower at 1,114.19 points on Monday, its lowest finish in seven months, while the euro zone's blue chip Euro STOXX 50 dropped 1.5 percent to 2,511.83 points. Charts suggested the market was also expected to recover on technical buying, with major stock indexes seen bouncing after they reached an 'oversold' level not seen since mid-2011. The Euro STOXX 50's 14-day relative strength index (RSI), a widely-used momentum indicator, fell to 25.8 on Monday. A RSI of 30 or below signals 'oversold' conditions. "After the recent price losses, the index shows a short-term oversold technical situation. Therefore we expect a short-term stabilisation," Sophia Wurm, technical analyst at Commerzbank, said, adding that support was seen at 2,440 points. "Nevertheless, as long as the short-term downtrend remains in place, the defensive technical stance against the index should be maintained." Analysts said the market was getting some support from comments by Minneapolis Fed President Narayana Kocherlakota and Dallas Fed head Richard Fisher. Both downplayed concerns of an imminent end to monetary stimulus and said late on Monday the market reaction was not yet cause for concern. Investors' kept a close eye on China as worries about the country's banking sector have injected further volatility into the market. A recent spike in inter-bank borrowing costs have raised concerns that strains in the banking system could further hit the country's slowing growth. China shares hit a 4-1/2-year low on Tuesday. "Whilst the squeeze is seasonal and should dissipate to some extent in July, it is hard to be sure of a normalisation thereafter. To imagine this isn't impacting consumer credit is very hard to imagine," Guy foster, head of portfolio strategy at Brewin Dolphin, said. Investors awaited more U.S. data for hints about the Fed's timing to trim its bond buying operations. Focus will be on durable goods numbers for May, due at 1230 GMT, Redbook's weekly retail sales data at 1255 GMT, S&P Case/Shiller Home Price Index for April at 1300 GMT and new home sales for May at 1400 GMT. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0632 GMT: LAST PCT CHG NET CHG S&P 500 1,573.09 -1.21 % -19.34 NIKKEI 12,969.34 -0.72 % -93.44 MSCI ASIA EX-JP 481.16 -0.11 % -0.53 EUR/USD 1.3134 0.13 % 0.0017 USD/JPY 97.48 -0.25 % -0.2400 10-YR US TSY YLD 2.503 -- -0.04 10-YR BUND YLD 1.787 -- -0.04 SPOT GOLD $1,282.51 0.1 % $1.22 US CRUDE $95.31 0.14 % 0.13 > China shares extend bear slump, pull down rest of Asia > Wall Street ends down but off lows as bond prices gain > Nikkei reverses losses on weak yen > TREASURIES-Prices rebound, yields fall from near 2-year highs > Fed officials put brakes on dollar rally; China markets eyed > Gold inches up as Fed officials downplay stimulus wind-down > Copper edges down to near 3-year low on China growth fears > Brent drops below $101 on China, U.S. demand worries COMPANY NEWS CARREFOUR The world's second largest retailer is exploring a sale of its businesses in China and Taiwan, including a possible initial public offering in Hong Kong or a combination of some of those assets with another company, The Wall Street Journal reported on Monday, citing people familiar with the matter. ROCHE Privately held Indian drugmaker Intas Pharmaceuticals Ltd said it signed an agreement with Roche Holding AG to sell a generic version of the Swiss drugmaker' s chemotherapy drug Xeloda. For more, click on: VW, BMW, DAIMLER The European Union late on Monday agreed a compromise deal to enforce stricter rules on carbon dioxide emissions for all new EU automobiles from 2020. DEUTSCHE TELEKOM Germany's telecoms regulator wants an early auction of mobile frequencies to make sure demand for growing wireless services is being met, despite opposition from cash-strapped operators in Europe's biggest mobile market. EUROTUNNEL The head of the operator of the Channel Tunnel said he had decided to ask the market authorities to look into the publication of information relating to a European Commission statement on its train charges last Thursday. The stock has since lost 18 percent.