European Factors to Watch-Shares seen up, focus on central banks

Mon Jul 29, 2013 2:54am EDT

LONDON, July 29 (Reuters) - European shares were set to edge higher on
Monday on positive mergers and acquisitions news and as investors bet major
central banks will offer reassurance that their monetary policies will remain
accommodative for the foreseeable future.
    The U.S. Federal Reserve, the European Central Bank and the Bank of England
all hold policy meetings this week. The market's initial focus will be the Fed's
two-day meeting, starting on Tuesday, for more clarity on when it could start
slowing its $85 billion monthly bond purchases. 
    "Markets are looking for policy hints rather than changes this week. All
eyes on whether QE3 tapering any closer by the Fed, but we still believe more
data needed before the call is made, especially with non-farm payrolls on
Friday," Mike van Dulken, head of research at Accendo Markets, said.
    "M&A perking up optimism after the Publicis-Omnicom tie-up over the weekend
and the Perrigo-Elan deal this morning. China data weakness after recent GDP
likely to keep open the debate on slowing." 
    Analysts said there were concerns that manufacturing surveys from China
later this week would point to more weakness in the world's second-biggest
economy.
    On the mergers and acquisitions front, global ad agencies Publicis 
and Omnicom planned a mega merger in a $35.1 billion deal, while U.S.
generic drugmaker Perrigo agreed to buy Elan for $8.6
billion.  
    Other media companies, including WPP and Havas, were
likely to gain.
    At 0649 GMT, futures for Euro STOXX 50, Britain's FTSE 100,
Germany's DAX and France's CAC were 0.2 to 0.3 percent higher.
    The FTSEurofirst 300 index of top European shares closed 0.3
percent lower at 1,205.19 on Friday. The index, which is up 4.6 percent so far
this month, is headed for its best monthly performance since mid-2012.
    U.S. stocks erased losses late in Friday's session to close slightly higher.
    Investors will keep a close eye on more company results after the French
food group Danone said Europe showed early signs of stabilisation in
the second quarter, while Dutch delivery group TNT Express swung to a
second-quarter operating loss of 280 million euros ($371.4 million).
  
    According to Thomson Reuters StarMine data, out of 35 percent of the STOXX
Europe 600 companies that have reported second-quarter results so far,
55 percent have met or beaten profit forecasts. 
    In the United States, 52 percent S&P 500 companies have reported
results, of which 73 percent have met or beaten and the rest have missed
predictions.
--------------------------------------------------------------------------------
     MARKET SNAPSHOT AT 0652 GMT                                  
                                                 LAST    PCT CHG   NET CHG
     S&P 500                                 1,691.65     0.08 %       1.4
     NIKKEI                                 13,661.13    -3.32 %   -468.85
     MSCI ASIA EX-JP                           519.23     -0.9 %     -4.73
     EUR/USD                                   1.3268    -0.08 %   -0.0010
     USD/JPY                                    97.84    -0.42 %   -0.4100
     10-YR US TSY YLD                           2.549         --     -0.02
     10-YR BUND YLD                             1.655         --     -0.01
     SPOT GOLD                              $1,326.46    -0.51 %    -$6.83
     US CRUDE                                 $104.25    -0.43 %     -0.45
 
  > Japanese stocks lead Asia lower as yen firms                     
  > Wall St wipes out losses late to end with slim gain                     
  > Nikkei falls below 14,000 as exporters drag on strong yen               
  > TREASURIES-Prices gain, Fed meeting in focus                          
  > Dollar retreats ahead of Fed meet, hits 1-mth low on yen              
  > Gold slips after three-week gain, Fed meeting eyed                    
  > Copper hits 3-week low on weak China demand outlook                  
  > Brent little changed above $107, weak demand weighs as dollar supports 
    
    COMPANY NEWS
    PUBLICIS 
    A proposed mega-merger between global ad agencies Publicis and Omnicom
 could bring rival accounts such as Coca-Cola and PepsiCo
 under one firm, underscoring the scale of the $35.1 billion deal and the
potential conflicts it raises. 
    
    ELAN 
    U.S. generic drugmaker Perrigo agreed to buy Elan for $8.6 billion
on Monday, ending a takeover battle over the Irish company which put itself up
for sale last month. 
    
    DANONE 
    The French food group said Europe showed early signs of stabilisation in the
second quarter notably in the core dairy division, and it kept its full-year
2013 profit and sales outlook. 
    
    TNT 
    Dutch delivery group TNT Express swung to a second-quarter operating loss of
280 million euros ($371.4 million) because of goodwill impairments and said the
rest of the year would remain tough in its main markets. 
    
    ABERDEEN ASSET MANAGEMENT 
    Aberdeen Asset Management said clients pulled 3.4 billion pounds ($5.23
billion) from its range of funds in the three months to end-June, more than
analysts had forecast. 
 
    JCDECAUX 
    The outdoor advertising group reported on Monday a 5.5 percent rise in
first-half net profit and said it expects a slight decrease in organic revenues
in the third quarter. 
    
    BARCLAYS, LLOYDS BANKING GROUP 
    Barclays will this week say how it plans to meet tougher UK rules on
capital, while strong earnings from Lloyds will pave the way for Britain to sell
some of its shares in the bank. 
    Barclays' advisers have sounded out investors about a possible 4 billion
pound ($6.15 billion) rights issue, the Sunday Times reported.
     
    NOVARTIS 
    Teva Pharmaceutical Industries' $4 billion-a-year multiple
sclerosis drug Copaxone will lose its patent protection in 2014 because of a
ruling from a U.S. appeals court, making it potentially prey to cheaper
generics, developed by Novartis and others. For related articles, click on
 
    
    ERAMET 
    The mining group recorded a loss in the first half of 2013, hit by a drop in
nickel prices, and said its operating results in the second-half would be worse.
 
    
    SIEMENS 
    Chief Executive Peter Loescher is to leave the company four years before the
end of his contract, after the engineering group last week issued its second
profit warning this year. 
    Separately, the company is probing its China operations as sales and orders
in the world's second-largest economy have failed to grow, Wirtschaftswoche
reported without citing the source of the information. 
    Related news 
    
    POLYMETAL 
    Russian precious metals miner Polymetal expects to record a non-cash
impairment charge in its first-half financial results due to lower commodity
prices, it said on Monday. 
    
    COMMERZBANK 
    Several German banks face new write-offs and may need to raise more capital
ahead of next year's planned European bank stress tests, Der Spiegel reported,
without citing sources. 
   
    RYANAIR 
    Cutbacks by rivals and extra charges for choosing seats helped low-cost
airline Ryanair meet forecasts with profit of 78 million euros ($103 million) in
the three months to June, the Irish airline said on Monday. 
    
    BMW 
    Rolls-Royce, the German automaker's U.K. ultra-luxury brand is mulling to
increase production and the number of dealerships as growing demand may push
sales to about 4,000 vehicles this year from 3,575 in 2012, Wirtschaftswoche
reported, citing CEO Torsten Mueller-Oetvoes. Related news 
    
    PRAKTIKER 
    As many as 4,000 jobs could be lost at the home improvement retailer and its
Max Bahr chain following insolvency filings, Bild reported, citing the group's
deputy board chairman. 
    
    AIR FRANCE-KLM 
    The carrier is in talks with German turnaround specialist Intro Aviation to
sell its CityJet regional airline, Hans Rudolf Woehrl, co-founder of Intro
Aviation, said.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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