European Factors to Watch-Shares seen higher, focus on earnings
LONDON, July 9 (Reuters) - European shares were expected to extend gains on Tuesday, tracking Wall Street and markets in Asia, with growing optimism about the health of the U.S. economy and a good start to the earnings season boosting sentiment. Alcoa, the largest U.S. aluminum producer, posted a larger-than-expected adjusted second quarter profit on Monday due to productivity gains and a strong performance from its engineered products business. "Alcoa has kicked off the earnings season with a modest beat ... The fact it sees Chinese aluminium demand growing at 11 percent this year compared to 9 percent in 2012 is positive," IG Markets said in a note. According to Thomson Reuters StarMine, top analysts predict that STOXX Europe 600 companies will beat expectations for the second quarter by 0.4 percent. Consumer staples are seen recording 1.4 percent higher earnings than estimates, while financials are likely to beat predictions by 0.8 percent. At 0625 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were 0.5 to 0.7 percent higher. The euro zone's blue chip Euro STOXX 50 rose 2.1 percent to 2,650.85 points on Monday. The index closed above its 200-day moving average, now at 2,635, and above its 10-day moving average at 2,605.86. "Short-term technical indicators are signalling a positive undertone within the recovery and should lead the Euro Stoxx 50 to establish itself above the 10-day moving average," Thorsten Grisse, technical analyst at Commerzbank, said. However, the index was expected to face resistance at around 2,664 points - its 23.6 percent retracement of a rally from mid-2012 to May this year and the uptrend channel in place since June last year. The next resistance was seen at its 100-day moving average at 2,680.57 points. Analysts said sentiment also improved as concerns about some highly debt-laden European countries eased. Greece secured a lifeline from the euro zone and the IMF on Monday, while Portugal's coalition partners healed a internal rift with a cabinet reshuffle that offered some political stability. However, the International Monetary Fund said the euro zone must take coordinated action to revive economic growth, saying the region needed to repair bank balance sheets, advance a banking union and support demand. European shares were expected to mirror gains in other major markets. Japan's Nikkei climbed 2.4 percent on Tuesday, while U.S. stocks closed 0.2 to 0.6 percent firmer overnight, building on gains sparked by last week's robust employment data. The FTSEurofirst 300 ended 1.4 percent stronger. On the data front, focus at 0830 GMT will be on UK manufacturing and industrial output data for May, which is expected to show growth from the previous month. In the U.S., ICSC/Goldman Sachs will release chain store sales for the week ended July 6 at 1145 GMT. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0626 GMT LAST PCT CHG NET CHG S&P 500 1,640.46 0.53 % 8.57 NIKKEI 14,472.90 2.58 % 363.56 MSCI ASIA EX-JP 497.80 0.91 % 4.51 EUR/USD 1.2884 0.12 % 0.0015 USD/JPY 101.21 0.26 % 0.2600 10-YR US TSY YLD 2.655 -- 0.02 10-YR BUND YLD 1.704 -- 0.00 SPOT GOLD $1,257.21 1.73 % $21.32 US CRUDE $103.25 0.11 % 0.11 > Asian shares gain but China worries linger, dollar firm > Wall St rises as attention turns to earnings season > Nikkei rebounds on strong global lead; China market eyed > U.S. bonds rally after post-payrolls selloff > Dollar claws higher, seen supported by Fed policy view > Gold climbs 1 pct for second day on technical buying > Copper steady as Fed stimulus, growth worries weigh > Brent slips towards $107, off 3-month top as supply worries ease COMPANY NEWS LVMH The luxury group said it acquired 80 percent of Italian luxury cashmere clothing brand Loro Piana for 2 billion euros, boosting its presence in high-end handcrafted products popular with Asian buyers. MARKS & SPENCER British retailer Marks & Spencer on Tuesday posted an eighth consecutive quarterly fall in underlying sales of general merchandise, though the outcome did represent a slowing in the rate of decline. PSA PEUGEOT CITROEN The carmaker said its global vehicle sales fell 9.8 percent in the first half as it lost ground in a shrinking European market, partly offset by gains in China and Latin America. DEUTSCHE ANNINGTON Germany's largest residential real estate company, revived plans for an initial public offering (IPO). In an accelerated bookbuilding on Tuesday/Wednesday, Deutsche Annington is offering 34.8 million shares in a price range of 16.50 euros to 17 euros. Related news MUNICH RE The floods that engulfed Germany last month may have been the country's costliest natural disaster on record, an executive of Munich Re told Sueddeutsche Zeitung. Related news SGL CARBON Credit rating agency Standard & Poor's cut its rating on SGL to BB- from BB, following an earlier announcement of a downgrade by Moody's. S&P cited a muted outlook for the steel sector and overcapacity in the graphite electrodes market. Related news ROYAL BANK OF SCOTLAND The British government has ruled out a broad investigation into whether Royal Bank of Scotland should be broken up and sold off in smaller component parts to foster more competition in the banking sector, The Guardian reported on Tuesday. BP The oil major drew tough questions on Monday from U.S. appeals court judges hearing a complaint by the oil company objecting to the payment of certain claims for damages related to the Gulf of Mexico spill, casting doubt on BP's effort to curb the payouts. VEOLIA ENVIRONNEMENT The company unveiled a reorganisation creating country-based directors for its water and waste management activities, as well as new innovation and markets, and technical and performance departments. EDF The French government said it planned to propose an average rise in electricity tariffs for households of 5 percent from Aug. 1, followed by a similar rise the following year.
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