Europe Factors to Watch-Shares to retreat from 3-month highs

Wed Sep 11, 2013 2:44am EDT

LONDON, Sept 11 (Reuters) - European shares were likely to edge lower on
Wednesday, with investors taking a breather after a strong rally and taking some
profits from three-month highs, although ebbing concerns about a U.S.-led
military attack on Syria were seen limiting losses.
    U.S. President Barack Obama pledged on Tuesday to explore Russia's proposal
for Syria to place its chemical weapons under international control and said he
had asked Congress to postpone a vote on authorising military
action. 
    At 0628 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were flat to 0.1 percent
lower.
    The FTSEurofirst 300 index ended 1.3 percent firmer on Tuesday at
1,243.60 points, the highest since late May. It is up 9.6 percent this year
partly on improving economic outlook. Data from China, the United States and
Europe have all suggested that the global economy is gathering steam.
    The market's technical outlook remained positive, with a broad rally on
Tuesday improving its medium-term outlook. The euro zone's blue chip Euro STOXX
50 rose 1.9 percent to 2,851.40 points in the previous session,
while the broader STOXX Europe 600 index climbed 1.3 percent to 309.80.
    "The STOXX 600 index is in a technical bull market. It was in a
trend-confirming consolidation during the last month on expectations that it
will break to the upside," Achim Matzke,  strategist at Commerzbank, said, but
added the index might face resistance at around 310-314, its high in May.
    He said the Euro STOXX 50 could struggle to convincingly break the
resistance level of 2,850, an area where it failed last month. "But our
expectations are that it will be able to cross the level this time."
    Investors will keep a close eye on U.S. macroeconomic numbers for hints
about the timing of the Federal Reserve's likely move to start reducing its
stimulus measures.
    Focus will be on the U.S. mortgage market index for the week ended Sept. 6 ,
due at 1100 GMT, and wholesale inventories for July at 1400 GMT. In the United
Kingdom, ILO unemployment numbers are due at 0830 GMT, with the market
predicting the rate to remain unchanged at 7.8 percent.
        
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    MARKET SNAPSHOT AT 0640 GMT:
                                                   LAST    PCT CHG   NET CHG
     S&P 500                                   1,683.99     0.73 %     12.28
     NIKKEI                                   14,425.07     0.01 %      1.71
     MSCI ASIA EX-JP                             534.04    -0.25 %     -1.32
     EUR/USD                                     1.3251    -0.12 %   -0.0016
     USD/JPY                                     100.32    -0.07 %   -0.0700
     10-YR US TSY YLD                             2.955         --     -0.01
     10-YR BUND YLD                               2.026         --      0.00
     SPOT GOLD                                $1,367.51     0.29 %     $3.92
     US CRUDE                                   $107.05    -0.32 %     -0.34
 
  > Asian stock rally takes a breather, yen in the doldrums          
  > S&P 500 gains for 6th straight session, Apple falls                     
  > Nikkei hits 7-week high as Syrian crisis worries ease                   
  > U.S. yields rise as Syria jitters ease, China data                    
  > Yen slides as diplomacy eases Syria tensions, China optimism          
  > Gold hits 3-week low as easing Syria tensions dent safe-haven appeal  
  > Copper rises on China demand hopes, improved risk appetite           
  > Brent steady after 2-day fall as Syria tension eases                   
    
    COMPANY NEWS:
    
    ROYAL DUTCH SHELL 
    An 8.3 billion pound ($13 billion) project to build a refinery and
petrochemical plant in eastern China involving Royal Dutch Shell has been
shelved after losing political support, the Telegraph newspaper reported, citing
sources. 
    
    TESCO 
    The retailer is to lend U.S. billionaire Ron Burkle's Yucaipa investment
company 80 million pounds ($126 million) to take the loss-making Fresh & Easy
stores off its hands, marking the end of a six-year attempt to crack the U.S.
market. 
    
    KINGFISHER 
    Europe's biggest home improvements retailer met forecasts with a 1.6 percent
fall in first-half profit as a better second quarter was not enough to fully
offset the impact of poor weather in the first quarter. 
    
    DAIMLER 
    Auto group Daimler expects the profit margin at its Mercedes-Benz luxury car
business to improve further next year thanks to a rejuvenated model range, its
chief executive told Reuters on Tuesday. 
    Related news 
    
    BMW 
    BMW expects vehicle sales in its domestic market to remain at the same level
this year as in 2012, Germany chief Roland Krueger told Reuters on Tuesday.
 
    Related news 
    
    SOCIETE GENERALE 
    The French bank is eyeing a 10 percent core capital ratio under tougher
Basel III rules by end-2013, higher than its official target of 9.5, its deputy
chief executive said. 
    
    GAS NATURAL 
    Spanish bank La Caixa is studying reducing its more than 34
percent stake in Gas Natural, Expansion reports on Wednesday. The lender wants
to remain the top shareholder in the company, according to the report, and could
reduce its holding to around 20 percent.
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