Europe Factors to Watch-Shares set to rise after World Bank forecast

Wed Jan 15, 2014 2:31am EST

PARIS, Jan 15 (Reuters) - European stocks were seen inching higher on
Wednesday, mirroring gains on Wall Street and in Asia on renewed hopes for
global growth.
    Boosting sentiment, the World Bank raised its forecast for growth for the
first time in three years, signalling the world economy is finally pulling out
of a long and sluggish recovery that followed the global financial crisis.
    The bank, which predicts global gross domestic product to expand 3.2 percent
this year from 2.4 percent in 2013, said the global economy had come to a
"turning point," as fiscal austerity and policy uncertainty no longer weighed as
heavily on most richer economies. 
    At 0722 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were up 0.3-0.5 percent.
    Sentiment was also boosted by forecast-beating U.S. December retail sales
data, a sign the economy gathered steam at the end of last year and was poised
for stronger growth in 2014. 
    The euro zone banking sector - which has already surged 8 percent
since the start of the year - will be in focus on Wednesday after the European
Central Bank said lenders will not be required in upcoming stress tests to
adjust their sovereign debt portfolios they hold to maturity to reflect current
market values.
    "Sovereign exposures, both held-to-maturity and available-for-sale
exposures, will be included in the stress test, although it is not foreseen that
HTM portfolios will be marked-to-market," the ECB said in a letter signed by its
president, Mario Draghi. 
    European stocks eked out gains on Tuesday, reversing an early sharp
pullback, helped in part by the forecast-beating U.S. December retail sales.
    The euro zone's blue-chip Euro STOXX 50 index is up 0.3 percent
so far this year and trades just a few points below five-year highs hit
recently.
    "Since the start of the year, on five occasions sellers tried to push
indexes below support levels, but every time, a powerful wave of buyers has
bought the dip which shows how strong the bullish trend is," Aurel BGC chartist
Gerard Sagnier said.
    "It's a pattern that we should see all year, and investors should take
advantage of all the dips to boost their positions. Indexes are entering a
robust bull market phase, with a target of 3,500 points for the Euro STOXX 50."
    
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0725 GMT: 
                                        LAST         PCT CHG    NET CHG
 S&P 500                                1,838.88     1.08 %     19.68
 NIKKEI                                 15,808.73    2.5 %      386.33
 MSCI ASIA EX-JP                        457.77       0.08 %     0.35
 EUR/USD                                1.3632       -0.34 %    -0.0047
 USD/JPY                                104.34       0.13 %     0.1400
 10-YR US TSY YLD                       2.869        --         0.00
 10-YR BUND YLD                         1.821        --         0.01
 SPOT GOLD                              $1,242.00    -0.22 %    -$2.71
 US CRUDE                               $92.52       -0.08 %    -0.07
 
  > GLOBAL MARKETS-Asian stocks, dollar up on global growth hopes 
  > US STOCKS-Wall St rebounds as retail sales point to healthy economy 
  > Nikkei logs best day in 4 months after Tuesday's slide 
  > FOREX-Yen resumes slide, Aussie also feeling the heat 
  > PRECIOUS-Gold drops on stronger equities, US retail sales data 
  > METALS-Copper steady, World Bank growth forecasts support 
  > Brent drops towards $106 on Iran pact; U.S. data eyed 
    
    COMPANY NEWS:
    
    EUROPEAN BANKS
    European banks will not be required in upcoming stress tests to adjust their
sovereign debt portfolios they hold to maturity to reflect current market
values, the European Central Bank said in a letter published on Tuesday.
    "Sovereign exposures, both held-to-maturity and available-for-sale
exposures, will be included in the stress test, although it is not foreseen that
HTM portfolios will be marked-to-market," the ECB said in a letter signed by its
president, Mario Draghi. 
    
    BANKIA 
    The Spanish government is considering selling part of its stake in
bailed-out Bankia as soon as the first quarter of this year, official and
banking sources said, hoping to recoup part of the multi-billion euro rescue
under favourable market conditions. 
    
    MONTE DEI PASCHI DI SIENA 
    The bank's chairman and CEO will stay on in their jobs even though they were
forced to delay a vital $4 billion share sale that was planned for this month
but will now not take place before mid-2014. 
    
    K+S 
    The German potash maker expects to hit its profit target for 2013, with the
market turmoil causing a drop of around 25 percent on last year's result, the
company said on Tuesday. 
    
    CASINO 
    The French retailer said sales growth accelerated in the fourth quarter,
driven by robust growth in Brazil and a further improvement at its hypermarkets
in France, where the retailer continued to reap the benefits of previous price
cuts.
    
    FIAT 
    The chief executive officer of Chrysler Group LLC, which is planning to
invest more than $1 billion to modernize a Canadian minivan plant, said on
Tuesday it could scrap the upgrade and move production and jobs elsewhere if
government and labor officials fail to come through with financial incentives.
    
    ENI 
    The Italian energy firm will give up all of its Polish shale gas permits
because of tough geology and an unclear regulatory environment, the same issues
that have already pushed other foreign firms to quit Polish shale, industry
sources said.
    
    TELECOM ITALIA 
    Dissident Telecom Italia investor Marco Fossati has stepped up efforts to
prevent a fire sale of TIM Brasil TIMP3.SA, declaring that it could be worth
more than $40 billion, nearly three times its market value.
    
    SACYR 
    The Panama Canal Authority (PCA) said on Tuesday it might take over a key
part of the waterway's expansion if the consortium in charge of the project, led
by Spain's Sacyr, makes good on a threat to suspends work.
    
    BARRY CALLEBAUT 
    Barry Callebaut, the world's biggest maker of chocolate and cocoa products,
confirmed its mid-term targets on Wednesday, even as it posted first-quarter
sales volume growth that fell short of expectations.
    
    TOTAL 
    The French oil major said it has received approval from Chinese authorities
to invest in a $4 billion project to turn coal into petrochemical products in
the northern province of Inner Mongolia. 
    
    BAYER 
    Regeneron will report about $400 million in U.S. sales of eye drug
Eylea for the fourth quarter of 2013, bringing the total for the year to about
$1.4 billion, with lots of room for future growth, the U.S. biotech company said
on Tuesday. Regeneron sells the drug in Europe through Bayer.
    
    VOLKSWAGEN 
    Most of the $7 billion that the German carmaker will invest in North America
over five years will go to Mexico, the company's chief executive said on
Tuesday. 
    
    CODERE 
    Spanish gaming group Codere said late on Tuesday that it would not make a
interest payment due on Jan. 15 this year on a 2015 bond issue, adding that it
was continuing debt restructuring negotiations with creditors.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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