Europe Factors to Watch-Shares to extend 2-week pullback
PARIS, Dec 16 (Reuters) - European stocks are set to fall on Monday, extending a sharp two-week retreat as bets increase on the U.S. Federal Reserve starting to wind down stimulus at this week's policy-setting meeting. Adding to negative sentiment on Monday, data showed growth in activity in China's vast factory sector slowed to a three-month low in December, in line with other recent data pointing to a resilient but slowing economy. The flash Markit/HSBC Purchasing Managers' Index (PMI) fell to 50.5 from November's final reading of 50.8, although for a fifth consecutive month remained above the 50 line which separates expansion of activity from contraction. "On one side, the Fed is about to start trimming its quantitative easing programme, while on the other side, macro data from China as well as from Europe isn't bullish at all, so it's very tempting to just move to the sidelines at this point," a Paris-based equity and exchange-traded funds trader said. At 0717 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were down 0.2-0.4 percent. Recent U.S. data showing growth in jobs, retail sales, services and overall output in the economy - combined with last week's breakthrough budget deal in Washington - has fuelled speculation that the Fed will announce a reduction to its $85-billion a month in bond purchases on Wednesday. That has prompted investors to book profits on risky assets, which have strongly benefited from the central bank's massive liquidity injection. The FTSEurofirst 300 index of top European shares, which was up 15 percent on the year at the end of November, has dropped about 4.8 percent since then. "Given the gains seen this year, it could be argued that the recent declines are a natural consequence of some end of year profit-taking after what has been a particularly good year for equities," Michael Hewson, chief market analyst at CMC Markets, wrote in a morning note. "While this is undoubtedly true, it is also true that despite the gains seen this year, there is a sense that these gains don't reflect the underlying fragility of the various economies in Europe and to a lesser extent in the U.S." Telecom stocks will be in the spotlight after The Wall Street Journal reported that U.S. telecom firm Sprint Corp is mulling a takeover of rival T-Mobile US. ------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0718 GMT: LAST PCT CHG NET CHG S&P 500 1,775.32 -0.01 % -0.18 NIKKEI 15,152.91 -1.62 % -250.2 EUR/USD 1.3756 0.11 % 0.0015 USD/JPY 102.73 -0.45 % -0.4600 10-YR US TSY YLD 2.841 -- -0.03 10-YR BUND YLD 1.814 -- -0.02 SPOT GOLD $1,235.30 -0.2 % -$2.50 US CRUDE $96.38 -0.23 % -0.22 > GLOBAL MARKETS-Asia shares slip, Japan data outshines China > US STOCKS-Wall St ends flat; falls for week with eyes on Fed > Nikkei drops, index-heavy stocks retreat ahead of Fed verdict > FOREX-Dollar pins hopes on Fed, yen bounces on profit-taking > PRECIOUS-Gold eases as Fed meeting looms, stimulus outlook eyed > METALS-London copper slips on jitters ahead of Fed tapering call > Brent rises above $109 on Libya, gains capped ahead of Fed meet COMPANY NEWS: TELECOM SECTOR Sprint Corp is mulling a takeover of smaller rival T-Mobile US and could make a bid in the first half of 2014, according to a report in The Wall Street Journal. CARREFOUR, KLEPIERRE Carrefour said on Monday it had agreed to buy a portfolio of 127 shopping malls in France, Spain and Italy from real estate group Klepierre for 2 billion euros ($2.75 billion). BASF, THYSSENKRUPP, HEIDELBERGCEMENT The European Commission is opening an investigation into the discounts German industries get on renewable energy surcharges, according to a draft letter sent to Berlin, which could lead to higher costs for thousands of firms in Europe's biggest economy. IBERDROLA Toshiba's 6502.T U.S. unit Westinghouse is close to announcing plans to buy Spanish utility Iberdrola's 50 percent stake in British nuclear consortium NuGen for over 100 million pounds ($163 million), the Financial Times reported, citing sources. AURUBIS German copper smelter Aurubis said on Monday it expects significantly better profits and higher copper prices in its new fiscal year which started on Oct. 1 following a sharp drop in earnings in its previous financial year. TELECOM ITALIA Italian markets watchdog Consob may fine the world's biggest money manager BlackRock Inc for not informing the regulator soon enough that it had increased its stake in the Italian telecoms company, Consob's chairman told Italian daily Il Sole 24 Ore on Sunday. DIA Spain's discount grocer Dia is negotiating the purchase of super market chain El Arbol, owned by several savings banks, for around 100 million euros, Expansion reported, citing unnamed sources close to the deal. ACS ACS has included its 17 percent stake in mobile operator Yoigo and 5 percent of power firm Iberdrola among 4.7 billion worth of assets it wants to sell to cut debt, Europa Press reported, citing company data. CIR, VERBUND Sorgenia, the energy unit of the De Benedetti family's holding company, will likely meet with its banks on Wednesday to discuss a debt restructuring, Corriere della Sera reported on Saturday. The lenders may ask the holding company and Sorgenia's inveStor Verbund to give their contribution to the plan, the daily said. MEDIASET, TELEFONICA, PRISA The Italian broadcaster is reviewing, together with Spain's Telefonica, the possibility to buy a majority stake in Spanish broadcaster Digital+ from media group Prisa, Il Sole 24 Ore reported on Sunday. MONCLER Italian down jacket maker debuts on MTA main segment at the Milan Bourse. MICHELIN Michelin North America issued a safety recall for commercial light truck tires.
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