Europe Factors to Watch-Shares set to dip; Volkswagen eyed
PARIS, Feb 24 (Reuters) - European stocks were set to fall on Monday, reversing the previous session's gains as worries brewing over credit restrictions to China's property sector kept investors on edge. The retreat could be limited, however, after Moody's raised Spain's sovereign debt rating one notch to Baa2 with a "positive" outlook, fuelling expectations of an economic recovery in the euro zone this year. Volkswagen will be in focus, with its shares indicated to drop 2.8 percent according to pre-market data, after the German carmaker unveiled plans to buy out minority shareholders of Swedish trucks division Scania for 6.7 billion euros ($9.2 billion) and issues a disappointing 2014 outlook. The telecom sector will also be in the spotlight, after Les Echos newspaper reported that French cable firm Numericable is in talks to buy mobile operator SFR in a deal that would value the unit of media group Vivendi at more than 15 billion euros. Separately, La Lettre de l'Expansion reported that Vodafone could also bid for SFR. At 0729 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were down 0.2-0.3 percent. The Shanghai Composite Index sank 1.8 percent on Monday to its lowest in two weeks, knocked lower by news reports saying Chinese banks had begun tightening property loans. "There are a few China jitters after reports of banks restricting lending to property companies in an attempt to head off a housing bubble," Capital Spreads trader Jonathan Sudaria wrote in a note. "But moving growth away from property speculation and towards a more diverse range of industries is probably a good thing in the long run." European stocks have sharply risen over the past 2-1/2 weeks, with the STOXX 50 index gaining nearly 6 percent and France's CAC 40 hitting a 5-1/2 year high on Friday, boosted in part by hopes of a rebound in corporate profits in Europe in 2014. "Resistances are being crossed, and indexes are clearly in a bullish trend," Aurel BGC chartist Gerard Sagnier said. "All the pull-backs we've seen since August have been buying opportunities to benefit from this powerful medium-term rally, and the strategy remains the same: keep buying the dips." About 60 percent of companies have reported results so far in the European earnings season, and 58 percent of them have met or beaten forecast, with quarterly profits up 1.5 percent year-over-year and revenues up 1.7 percent, Thomson Reuters StarMine data shows. Overall, investors remained positive on European stocks, with the latest EPFR Global data showing further brisk inflows into the region. At the country level UK, Spain and Italy equity funds again enjoyed solid inflows, EPFR said. So far this year, Europe equity funds have taken in over $24 billion, versus $5 billion at the same point in 2013. Europe equity funds have also attracted retail money for the sixth straight week, the longest such run since late 2006, EPFR said. ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0730 GMT: LAST PCT CHG NET CHG S&P 500 1,836.25 -0.19 % -3.53 NIKKEI 14,837.68 -0.19 % -27.99 MSCI ASIA EX-JP 457.34 -0.49 -2.27 EUR/USD 1.3743 0.04 % 0.0006 USD/JPY 102.22 -0.29 % -0.3000 10-YR US TSY YLD 2.725 -- -0.01 10-YR BUND YLD 1.665 -- 0.00 SPOT GOLD $1,327.10 0.31 % $4.09 US CRUDE $102.40 0.2 % 0.20 > GLOBAL MARKETS-Shares sag as China market sinks, yen recovers > US STOCKS-Wall St dips with S&P 500's record high in sight > Nikkei touches 3-week high in choppy trade, but investors cautious > FOREX-Euro steady as Ukraine unrest ebbs, dollar eyes data > PRECIOUS-Gold edges lower after 3rd week of gains > METALS-Copper falls to more than 2-week low on China demand worries > Brent rises above $110 on hopes for revived demand growth COMPANY NEWS: SPANISH BANKS The Bank of Spain said late on Friday it had told banks it was extending a recommendation to cap dividend payouts in cash at 25 percent of profits for another year, to encourage lenders to keep strengthening their capital. NUMERICABLE, VIVENDI, VODAFONE French cable firm Numericable is in talks to buy mobile operator SFR in a deal that would value the unit of media group Vivendi at more than 15 billion euros ($20.6 billion), Les Echos newspaper reported. Separately, La Lettre de l'Expansion reported that Vodafone could also bid for SFR. VOLKSWAGEN The carmaker plans to buy out minority shareholders of Swedish trucks division Scania SCVb.ST for 6.7 billion euros ($9.21 billion), which will be partly financed by issuing new preference shares and hybrid capital. DEUTSCHE BANK Deutsche Bank has laid out plans to reduce its U.S. balance sheet as the U.S. Federal Reserve adopts new rules to shield the country's taxpayers from costly bailouts, the Financial Times reported on Sunday. CREDIT SUISSE Credit Suisse Group AG agreed to pay $196.5 million and admit wrongdoing to settle U.S. Securities and Exchange Commission charges that it provided cross-border brokerage and investment advisory services to U.S. clients without first registering with the regulator. ALCATEL-LUCENT Alcatel-Lucent said it would stay out of a brewing price war in the telecom equipment market and set itself apart with better service and new products, including those from a new partnership announced on Sunday with Intel. FINMECCANICA Two Chinese companies, China Cnr Corporation and Insigma, have sent a letter of intent to Finmeccanica to express their interest in buying Ansaldo STS and loss-making Asakdo-Breda. The companies, according to an unsourced report in Corriere della Sera on Saturday, would be prepared to flank an Italian investor such as the state holding CDP's investment arm FSI. CARIGE The Carige foundation controlling the bank has asked the Bank of Italy whether a delay in the capital increase was possible, but was told to press ahead with the cash call, Il Sole 24 Ore said on Sunday. The foundation's board meets on Monday. AXA French insurance giant AXA Group and its partner in the United Arab Emirates, Kanoo Group, plan to become major shareholders in the UAE's Green Crescent Insurance Co (GCIC) GCIC.AD, GCIC said on Sunday. ACCOR Europe's largest hotel group said it had sold its stake in Australia's Reef Casino to Aquis, a Hong-Kong based investment firm, for about 55.5 million euros. OSRAM Osram has not held any talks with Siemens SIEGn.DE over whether and when the engineering group may cut its stake in the lighting maker from currently close to 20 percent, Sueddeutsche Zeitung quoted Osram Chairman Peter Bauer as saying in an interview published on Monday.