Europe Factors to Watch-Shares set to rally as Fed modestly trims stimulus
PARIS, Dec 19 (Reuters) - European stocks are set to rally on Thursday, tracking sharp gains on Wall Street after the U.S. Federal Reserve said it would modestly trim its stimulus programme and recommitted to low interest rates. The European telecom sector will be in the spotlight, after sources told Reuters U.S. group Dish was considering making a bid for T-Mobile US , majority owned by Deutsche Telekom. At 0625 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were up 0.7-0.9 percent. Investors took the Fed's decision to trim its bond buying by $10 billion to $75 billion a month as a modest step and one the U.S. economy could easily withstand, while the central bank also made its forward guidance more dovish. Tempering the long-awaited cut in the its massive asset purchasing programme, the Fed suggested its key interest rate would stay at rock bottom even longer than previously promised. Following the Fed's decision, The Dow Jones industrial average surged 1.8 percent and the S&P 500 gained 1.7 percent, both hitting record closing highs. "The Fed didn't set a calendar for future cuts, so it won't have its hands tied, giving it more flexibility," said Philippe Waechter, head of economic research at Natixis Asset Management. "At the same time, on interest rates, the Fed will start thinking about a hike when unemployment rate will fall to 6.5 percent and when inflation anticipations will rise to 2.5 percent." The FTSEurofirst 300, which was up 15 percent on the year at the end of November, has lost about 3.5 percent since then, as a raft of robust U.S. macro data sparked speculations that the Fed would start trimming stimulus this week. The expected market reaction in Europe to the Fed's announcement will be a "classic case of sell the rumour buy the fact," Michael Hewson, chief market analyst at CMC Markets, said. "We also need to put last night's actions in context in that the Fed is still introducing stimulus, just at a slightly reduced rate per month, and is not on a preset course, so those expecting further reductions on a regular basis could well be disappointed," he wrote in a note. The European banking sector will also be in focus after the European Union edged closer to agreeing a scheme to close failing banks but will leave big gaps in a wider reform that was supposed to unite the euro zone behind its troubled lenders. ------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0723 GMT: LAST PCT CHG NET CHG S&P 500 1,810.65 1.66 % 29.65 NIKKEI 15,859.22 1.74 % 271.42 EUR/USD 1.3682 -0.01 % -0.0001 USD/JPY 103.88 -0.36 % -0.3800 10-YR US TSY YLD 2.894 -- 0.01 10-YR BUND YLD 1.873 -- 0.03 SPOT GOLD $1,222.19 0.38 % $4.57 US CRUDE $97.73 -0.07 % -0.07 > GLOBAL MARKETS-Shares up as Fed draws taper's sting; dollar up > S&P 500 end at record highs after Fed trims stimulus > Tokyo's Nikkei share average closes up 1.74 pct > FOREX-Yen claws back from 5-year trough in wake of Fed taper > PRECIOUS-Gold edges up as investors take Fed taper in stride > METALS-Copper falls most in 3 weeks as Fed reduces stimulus > Brent slips towards $109 as dollar rises on Fed stimulus tapering COMPANY NEWS: SAAB, DASSAULT AVIATION Brazil has awarded a $4.5 billion contract to Saab AB to supply Brazil's air force with 36 new Gripen NG fighters by 2020. Aside from the cost of the jets themselves, the agreement is expected to generate billions of additional dollars in future supply and service contracts. The deal is the largest-ever foreign order for the Saab Gripen. France's Dassault Aviation was also a contender for the contract. DEUTSCHE TELEKOM Dish is considering making a bid for T-Mobile US next year, according to people close to the matter. T-Mobile US is majority owned by Deutsche Telekom. AMADEUS Spanish travel technology company Amadeus said on Wednesday it is buying U.S. technology group NMTI Holdings and its affiliate group Newmarket for $500 million. ACCIONA Spanish firm Acciona's Acciona Energia International has agreed to sell three wind farm operators in Germany to Swisspower Renewables for 157 million euros, the company said on Wednesday. K+S The German state of Hesse's new government wants to force potash and salt miner K+S to stop pumping salt waste water into the ground water and the Werra river, the coalition agreement presented on Wednesday showed. VINCI The French construction group has won a contract valued at 440 million euros to build an express-lane highway system in Atlanta, Georgia by 2018. NOVARTIS Sandoz, the generics division of Novartis, said it had initiated a late-stage clinical trial with its so-called biosimilar version of AbbVie's best-selling drug Humira. TELECOM ITALIA BlackRock will likely abstain in the vote on Italian group's board removal, news agency Ansa reported on Wednesday citing financial sources. An official for the U.S. fund did not comment on the issue. MONCLER The luxury jacket maker's shareholders will raise around 784 million euros in total from the biggest initial public offering in Italy since 2010 after an extra portion of shares was sold on Wednesday. UBI BANCA Moody's downgraded the Italian mid-sized lender to Baa3/P-3, outlook negative. SALINI IMPREGILO The Italian builder said on Wednesday it had won a contract worth around $302 million in Australia for the Skytrain project in Sydney, and other civil works. CIR Italian energy company Sorgenia, controlled by holding company CIR, has asked for a six-month freeze on its debt repayments as it seeks to address a lack of growth and high indebtedness.
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