European Factors to Watch-Shares to consolidate before Ifo, Fed
By Francesco Canepa
LONDON Dec 18 (Reuters) - European stocks were expected to edge higher at the open on Wednesday as investors squared their positions before German business morale data and a Federal Reserve decision on its equity-friendly stimulus programme.
At 0721 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were between 0.3 percent and 0.4 percent higher.
Investors were betting on a strong reading for the Ifo German business morale survey, due to be published at 0900 GMT, after the ZEW gauge of German analyst and investor sentiment surged far more than forecast on Tuesday.
"We're expecting something similar to the ZEW index, with the economy on a strong note," Markus Huber, senior sales trader at Peregrine & Black, said.
"We're going slightly long (European indexes) into the data and the Fed but, as always with these big decisions, we would never be fully positioned."
The Fed's Federal Open Market Committee is set to issue a statement at 1900 GMT, with most economists not expecting the bank to start winding down its monthly bond purchases, which have curbed returns on debt and driven money into stocks since September 2012.
European indexes have fallen between 3 and 6 percent in recent weeks as strong U.S. data fuelled market speculation the Fed may trim its asset purchase programme early.
Around 52 percent of FTSE 100 positions opened on IG's platform this week were "short", or bets the index will fall, compared to just 33 percent of total FTSE positions.
Possible share price volatility around the Fed announcement meant some investors were closing their positions and taking profit on the negative bets.
"Although some pundits will put (Wednesday's expected higher open) down to traders betting that there will be no tapering, it's probably no more than some shorts squaring their books ahead of the FOMC," Jonathan Sudaria, a dealer at Capital Spreads, said in a trading note.
"The major European indices have lost a fair amount of ground since putting in their annual highs so it's only prudent that the bears book some of their profits before an event which could potentially catapult the indices back into new territory."
> Asian shares creep up, dollar steady as Fed decision looms > Wall St ends slightly lower on day before Fed statement > Nikkei rises as investors sanguine ahead of Fed > TREASURIES-Prices rise after 2-year note auction > FOREX-Dollar on defensive as Fed verdict looms > Gold holds ground ahead of Fed decision on stimulus > METALS-Copper edges down for 2nd day ahead of Fed outcome > Brent holds above $108 ahead of Fed decision on stimulus
EURO ZONE BANKS
Euro zone finance ministers made progress on Wednesday on some details of a plan to close banks, paving the way for completion of a euro zone 'banking union' that is to restore confidence in the financial sector and boost growth.
A delay past January in a 3 billion euro ($4.1 billion) share issue by troubled Italian lender Monte dei Paschi di Siena would cause great uncertainty and could force the bank to be nationalised, its chairman said on Tuesday.
Credit Suisse is among several banks being probed by the U.S. Justice Department over the sale of flawed mortgage securities ahead of the financial crisis, according to two people familiar with the probes.
The German travel and tourism group reported an unexpected net profit for the 2012/13 financial year, thanks to British and German demand for holidays and restructuring measures.
BP Plc filed a fraud lawsuit in U.S. court on Tuesday to halt some of the $2.3 billion it set aside to compensate commercial fishermen for losses claimed after the British oil company's 2010 offshore oil spill, the biggest in U.S. history.
Workers at Total's 99,000 barrels-per-day (bpd) Grandpuits refinery near Paris have voted to end their five-day stoppage, leaving colleagues at three other plants still on strike in pursuit of a claim for improved pay deals.
The French oil services company said it had been awarded by Kuwait's state oil company a contract worth over $400 million for its consultancy services in project management and engineering.
Technip said on Tuesday it expected profitability at its subsea unit to fall next year, blaming delays in vessel maintenance and the start-up of a flexible pipe factory in Brazil.
Eurocopter issued a safety alert to operators of its EC135 helicopters after aircraft from the same fleet as one that crashed into a Scottish pub killing 10 people and some in Europe were found to have a fuel gauge defect.
Brazil's GPA, over which Casino took control last year, is gearing up for an aggressive price war in its food business, where it aims to maintain its operating profit margin by cutting expenses. Rival Carrefour CARR.PA is studying an IPO in Brazil to pay for more ambitious investments.
Spanish hotels group Iberostar is looking to sell its 5.29 percent holding in builder ACS when the stock rises, El Economista newspaper reported on Wednesday, citing comments by Iberostar Chairman Miguel Fluxa. The stake is worth about 410 million euros ($563 million) now.
Ireland's Ardagh is in talks aimed at saving a $1.7 billion deal to buy the U.S. business of Saint-Gobain unit Verallia in time to meet a mid-January deadline, according to court documents.
Separately, Saint-Gobain said it reached a deal with its banks to extend 4 billion euros ($5.49 billion) in syndicated loans to 2018 on cheaper terms. Reuters had reported on the extension talks last month.
The carmaker plans to invest 2 billion euros ($2.75 billion) in the next two years in the production network it needs to roll out its new C-Class model, management board member Andreas Renschler told Handelsblatt newspaper.
The sale of RWE's DEA will likely fetch less than the 5 billion euros the company had initially aimed to get in a sale of the oil and gas unit, the Wall Street Journal Deutschland reported, citing several people familiar with the matter.
- Lost airliner was diverted deliberately: Malaysian PM |
- Exclusive: Radar data suggests missing Malaysia plane deliberately flown way off course - sources
- Malaysia PM says lost plane's movements indicate a deliberate act
- UPDATE 2-Satellite data shows missing Malaysia plane may have flown thousands of miles-source
- UPDATE 1-Rolls-Royce concurs with Malaysia on missing jet's engine data