European Factors to Watch-Shares to extend bounce, DB seen up

Mon Feb 10, 2014 2:40am EST

LONDON Feb 10 (Reuters) - European stocks were seen opening higher on Monday, extending their bounce from oversold territory as investors continued bet on a gradual recovery in the global economy.

At 0733 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were up 0.3-0.4 percent.

Deutsche Bank was indicated to be among top gainers on the Dax as sources with knowledge of the matter told Reuters the bank is getting closer to settling a long-running lawsuit with the heirs of late media mogul Leo Kirch, who blame the lender for the downfall of his business.

The pan-European FTSEurofirst 300 index rose 0.8 percent on Friday, helped by upbeat comments from bellwether steelmaker ArcelorMittal on its outlook for Europe. The index has risen nearly 40 percent since June 2012.

Encouraged that Wall Street was able to weather a seemingly disappointing U.S. jobs report on Friday, most Asian markets made gains on Monday, led by Tokyo's Nikkei.

"Markets will kick off the week much as they left off last week, with a calmer and more constructive tone likely," strategists at Credit Agricole wrote in a note.

A selloff in emerging market assets, fuelled by signs of a slowdown in China and a range of issues in other countries, had pushed the Dax and FTSE indexes to their most overbought levels in many months last week.

A stabilisation in emerging markets has since revived appetite for shares, which many investors still see as the asset class of choice in an environment where the global economy is on a recovery path and the Federal Reserve scales back its bond-buying programme.

Justin Haque, a broker at Hobart Capital Markets, said investors may have become overly confident about the stock market's ability to withstand the withdrawal of monetary stimulus and cautioned the recent bounce may be short-lived.

"People are still buying the dips because that's what they have been doing for the past year and half," Haque said. "We had a bit of a short base but we're half way through covering it."

Europe bourses in 2014:

Asset performance in 2014:> GLOBAL MARKETS-Asia shares mostly higher, plenty of risk ahead > Wall St rallies to snap three-week skid > Nikkei rises to one-week high on softer yen, solid Wall St > TREASURIES-Yields fall as jobs data disappoints > FOREX-Dollar edges up to more than one-week high vs yen > Gold extends gains on weak U.S. jobs data, growth fears > Copper edges up on hopes Fed may trim stimulus more slowly > Brent slips towards $109 after touching 5-week high

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