European Factors to Watch-Markets seen firm, Nokia to rally
LONDON, Sept 3 (Reuters) - European stocks are seen edging higher on Tuesday, building on the previous session's rally and with Nokia set to rally after Microsoft said it will buy the Finnish company's phone business. Nokia, once the undisputed leader in mobile phones, has struggled to compete against rivals' smartphones, and investors have bet heavily against the stock by selling it short. With some 66 percent of lendable shares out on loan, according to Markit data, the shares could be vulnerable to a sharp short squeeze higher if the market gives its approval to the 5.44 billion euro ($7.2 billion) deal. "Nokia looks to open up between 22 and 25 percent. The Microsoft deal is pretty good news ... - the fact that they've found a buyer is quite impressive for Nokia," said Neil Marsh, strategist at Newedge. "It's all adding to the bullishness of the market, and I am still pretty bullish." The broader market, meanwhile, is likely to find support in news that China's service sector grew in August, following news earlier this week of strengthening factory activity there. Futures on the EuroSTOXX 50 index of euro zone blue chips were up 0.3 percent as were those for the British FTSE 100. Contracts for the German DAX gained 0.4 percent, while those on the French CAC added 0.1 percent by 0613 GMT. That puts the broad FTSEurofirst 300 index on track to test fresh one-week highs, building on a 1.8 percent rally in the previous session in what was its best daily showing in two months. Uncertainty over Syria, though, is likely to limit gains, as the U.S. administration tries to persuade Congress to back plans for an attack . Equities are likely to be hit by any signs of military action becoming more likely, while the potential cost could reignite concerns about the U.S. budget. Activity was likely to pick up as U.S. markets reopen after a long weekend, though school holidays in some parts of Europe may mean that trading volumes do not fully recover until next week after the summer lull. German Bund futures opened 6 ticks higher at 140.16, with the market stabilising as a decision on any military action in Syria has been delayed. Austria plans to sell 1.65 billion euros in 2023 and 2044 bonds later in the day. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0613 GMT: LAST PCT CHG NET CHG S&P 500 1,632.97 -0.32 % -5.2 NIKKEI 13,978.44 2.99 % 405.52 MSCI ASIA EX-JP 516.03 0.63 % 3.21 EUR/USD 1.3174 -0.12 % -0.0016 USD/JPY 99.54 0.19 % 0.2000 10-YR BUND YLD 2.8299 -- 0.04 SPOT GOLD $1,391.60 -- -$2.48 US CRUDE $106.85 -0.74 % -0.80 > GLOBAL MARKETS-Asia markets lifted by upbeat data; yen eases > Nikkei jumps to 3-week high as weaker yen powers exporters > FOREX-Yen soft, dollar at 1-month high as risk appetite trickles back > PRECIOUS-Gold extends losses as delay in Syria action, data weigh > METALS-London copper steady, rising risk appetite lends support > Brent holds above $114 as demand hopes offset easing Syria worries COMPANY NEWS NOKIA Microsoft Corp said it would buy Nokia's mobile phone business for 5.44 billion euros ($7.2 billion), and the Finnish firm said its CEO, Stephen Elop, would join Microsoft when the transaction closed. VODAFONE Verizon Communications agreed on Monday to pay $130 billion to buy Vodafone Group out of its U.S. wireless business. For the British group, the accord will allow it to return 71 percent of the net proceeds - or $84 billion including all of the stock - to shareholders while also ramping up investment in its networks to set itself apart from rivals. THYSSENKRUPP The German firm has denied a media report that it planned to scrap the sale of its Steel Americas business, the loss-making unit it has tried for more than a year to offload. EADS With U.S. military spending in decline, Boeing and Airbus investors have been counting on record commercial aircraft sales to keep profits rising. Now some industry experts are voicing concern that jetliner sales are at risk as economic conditions shift and smaller airlines that placed big orders take on bigger rivals. Airbus appears to have been pushed back once again in landmark efforts to break Boeing Co's grip on Japan's two largest airlines, which need to buy billions of dollars worth of planes in the next decade. MICHELIN The French firm said the European tyre market had grown by 4 percent in July, showing signs of stabilisation. NOVARTIS Novartis said on Tuesday its arthritis drug Ilaris was approved in the European Union to treat children from 2 years up. SANOFI The French drugmaker said one of its quadrivalent vaccines to prevent invasive meningococcal disease, which can cause meningitis, has been prequalified by the World Health Organization, which makes the Menomune vaccine eligible for purchase by United Nations Agencies, Sanofi said.
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