European Factors to Watch-Shares to gain, Fed move seen moderate

Wed Sep 18, 2013 2:32am EDT

LONDON, Sept 18 (Reuters) - European shares were set to edge closer to
recent five-year highs on Wednesday, with growing expectations that the U.S.
central bank would only announce a moderate cut in its programme of monetary
stimulus underpinning the market.
    The U.S. Federal Reserve is widely expected to pare back its $85 billion
monthly purchases of bonds at its two-day meeting, ending on Wednesday. But
latest Reuters polling shows economists expect only a $10 billion reduction,
down from a $15 billion median prediction in an August poll. 
    "As things stand, we feel the market is pricing in a $5 to $10 billion cut
in the pace of the buying. Any more than $10 billion should be ... negative for
equity," IG strategist Stan Shamu said in a note.
    The central bank's decision will be announced at 1800 GMT, while Fed
Chairman Ben Bernanke would start his news conference, likely to be his
penultimate press meeting before stepping down in January, half an hour later.
The central bank is also set to release fresh quarterly economic and interest
rate projections.
    At 0627 GMT, futures for the Euro STOXX 50, Germany's DAX 
and France's CAC were 0.1 to 0.2 percent higher. German Bund futures
 opened 3 ticks higher at 138.10. 
    The pan-European FTSEurofirst 300 index ended 0.5 percent lower at
1,252.63 points on Tuesday after closing at its highest level since June 2008 in
the previous session. The index is up more than 10 percent so far this year.
    Banking stocks will be in focus, with two Belgian business newspapers
reporting that the government was considering the sale of some of its 10.3
percent stake in French bank BNP Paribas to bring its sovereign debt
level below 100 percent of annual economic output. 
    The report followed Britain's move this week to sell a 6 percent stake in
part-nationalised Lloyds Banking Group, raising 3.2 billion pounds.
 
    Investors will also keep a close eye on macroeconomic numbers for the
market's near term direction. The U.S. Mortgage Bankers Association will
releases its weekly index for the week ended Sept. 13. It was 385.0 in the
previous week, while the refinancing index was at 1,528.5.
    U.S. housing starts data for August are due at 1230 GMT, with Economists
forecasting a 917,000 annualised rate in August, versus 896,000 in July. They
predicted a total of 950,000 permits in August, compared with 954,000 in the
prior month.
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  MARKET SNAPSHOT AT 0628 GMT: 
                                                 LAST    PCT CHG   NET CHG
     S&P 500                                 1,704.76     0.42 %      7.16
     NIKKEI                                 14,505.36     1.35 %    193.69
     MSCI ASIA EX-JP                           539.51    -0.14 %     -0.76
     EUR/USD                                    1.336     0.02 %    0.0003
     USD/JPY                                    99.22     0.11 %    0.1100
     10-YR US TSY YLD                           2.837         --     -0.01
     10-YR BUND YLD                             1.968         --     -0.01
     SPOT GOLD                              $1,303.20    -0.45 %    -$5.84
     US CRUDE                                 $105.75     0.31 %      0.33
   
  > Anxiety builds as markets wait on US stimulus judgement          
  > Wall St climbs on expectations for modest Fed taper                     
  > Nikkei rises to 8-week high as market primed for modest Fed tapering    
  > U.S. bond prices rise as investors await Fed tapering decision        
  > Dollar hovers near 4-week low as Fed decision looms                   
  > Gold falls below $1,300 as Fed stimulus decision looms                
  > Copper steady ahead of Fed announcement on stimulus cut              
  > Brent slips below $108 on Libya output rise, easing Syria fears        
    
    COMPANY NEWS
    BNP PARIBAS 
    The Belgian government is considering the sale of some of its 10.3 percent
stake in French bank BNP Paribas to bring its sovereign debt level below 100
percent of annual economic output, two Belgian business newspapers reported on
Wednesday. 
    
    INDITEX 
    Zara owner Inditex, the world's largest clothes retailer, said sales at the
start of the third quarter rose 10 percent, pointing to recovery after poor
weather and a weak yen weighed on profit in the first half. 
    
    DEUTSCHE BANK 
    Deutsche Bank intends to sell a stake in British housebuilder Crest
Nicholson via an accelerated bookbuilding, reducing its holding to
around 9 percent of the company. Related news 
    
    PEUGEOT 
    The French carmaker has mandated two banks to study a possible capital
tie-up with its Chinese partner Dongfeng 0489.HK, Les Echos reported on Tuesday.
 
    
    ROYAL BANK OF SCOTLAND 
    Four of Britain's largest institutional investors are part of a group
considering suing state-owned Royal Bank of Scotland over a share offer under
disgraced former Chief Executive Fred Goodwin. 
    
    BAYER 
    Bayer plans to cut 700 jobs at its MaterialScience business over the next
four years, of which 180 are in Germany, German newspaper Rheinische Post said,
citing statements made on Monday to workers in a meeting in Leverkusen, Germany.
 
    
    LANXESS 
    The world's largest maker of synthetic rubber for tyres said late on Tuesday
it aimed to cut costs by 100 million euros ($133.5 million) per year from 2015
to counter weak demand from the automotive industry. Related news 
    
    LUFTHANSA 
    Lufthansa's supervisory board is due to meet. People with knowledge of the
matter told Reuters last week the board was expected to approve management's
plans to order about 50 wide-body jets, which would be worth more than $10
billion at list prices. Related news 
    
    VOLKSWAGEN, AUDI 
    The German automaker plans to announce investments of 1.2 billion reais
($529 million) in Brazil to begin local assembly of its newest Golf model and to
restart local production by its Audi premium division, a spokesman for the state
of Parana told Reuters. 
    Volkswagen plans to start selling electric cars in the United States in
2015, the New York Times reported, citing a Volkswagen official. 
    
    ELECTROLUX 
    U.S. deliveries of the six top categories of home appliances, AHAM 6,
increased by 15.3 percent year-on-year in August, data from the Association of
Home Appliances Manufacturers showed. So far this year, shipments have increased
9.0 percent.
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