Europe Factors to Watch-Shares set to rise ahead of ECB

Thu Mar 6, 2014 2:26am EST

PARIS, March 6 (Reuters) - European stocks were set to rise on Thursday,
underpinned by diplomatic efforts to resolve the crisis in Ukraine as well as by
speculation that the European Central Bank could unveil further action to
support the euro zone's economic recovery.
    The telecom sector will be in the spotlight after France's Orange 
said it will slash its dividend by 25 percent, blaming continued pressure in its
home market, and bucking a recent trend of raised dividends among European
blue-chips. 
    Investors were also combing through a raft of corporate results, with
Deutsche Telekom posting a 6.5 percent rise in revenues as it won new
customers in Germany and the United States, while Merck, the world's
largest maker of liquid crystals for display screens, posted an unexpected
increase in adjusted core earnings.  
    "We haven't yet reached the point where profits are strongly rising in
Europe, but there are encouraging signs which is enough to keep the market going
for now," a Paris-based trader said.
     At 0714 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were up 0.3-0.4 percent.
    At a policy meeting later on Thursday, the ECB is expected to take action to
loosen lending conditions and drag inflation out of a "danger zone" that
threatens to stall the euro zone's fragile recovery. 
    Speaking to European lawmakers on Monday, ECB President Mario Draghi said
inflation in the euro zone is "way below" the ECB's goal.
    "These comments appear to have prompted speculation about possible action,"
Michael Hewson, chief market analyst at CMC Markets, wrote in a note.
    A minority of economists polled by Reuters last week said the ECB may be
forced to print money this year to fight off deflation risks and boost the
fragile growth. A third - 26 out of 78 economists polled - also predict a cut in
the ECB's refinancing rate from the current 0.25 percent, with most expecting a
reduction of 5 to 15 basis points mirroring the Bank of Japan's interest rate
moves. 
    Following a meeting in Paris that made little apparent headway, U.S.
Secretary of State John Kerry said discussions about Ukraine would continue in
the coming days, and he expected to meet Russian Foreign Minister Sergei Lavrov
again in Rome on Thursday. 
    Europe bourses in 2014:Asset performance in 2014:------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0718 GMT: 
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,873.81  -0.01 %     -0.1
 NIKKEI                             15,134.75   1.59 %   237.12
 MSCI ASIA EX-JP                       465.75    0.75%     3.46
 EUR/USD                               1.3728  -0.03 %  -0.0004
 USD/JPY                               102.68   0.37 %   0.3800
 10-YR US TSY YLD                       2.707       --     0.01
 10-YR BUND YLD                         1.614       --     0.01
 SPOT GOLD                          $1,335.40  -0.12 %   -$1.61
 US CRUDE                             $101.06  -0.38 %    -0.39
 
  > GLOBAL MARKETS-Asian shares mixed, euro hobbled ahead of ECB 
  > US STOCKS-S&P 500 closes flat, near record; Ukraine in focus 
  > Tokyo's Nikkei share average rises 2.05 pct 
  > FOREX-Euro on defensive before ECB; Aussie jumps on data 
  > Gold holds above $1,335; U.S. jobs data, Ukraine eyed for cues 
  > METALS-Base metals edge down after recent rally 
  > Brent steady after sliding on easing Ukraine risk, demand worries 
    
    COMPANY NEWS:
    
    ORANGE 
    France's largest telecom operator is to cut its dividend for this year by 25
percent to 0.60 euros per share to help it face continued pressure in its home
market where sales and profits fell again last year. 
    
    MERCK 
    Germany's Merck KGaA, the world's largest maker of liquid crystals for
display screens, reported an unexpected slight increase in adjusted core
earnings, as it continued to benefit from a cost cutting programme. 
    
    AVIVA 
    British insurer has unveiled a 6 percent increase in operating profit for
2013, one year into a financial spring clean of the company's businesses. 
    
    DEUTSCHE TELEKOM 
    Deutsche Telekom on Thursday reported a 1.3 percent rise in fourth-quarter
core profit on a 6.5 percent rise in revenues as it won new customers in Germany
and the United States. 
    
    VIVENDI BOUYGUES, ALTICE, NUMERICABLE 
    Vivendi said on Wednesday that it had received two offers for telecom unit
SFR from smaller rival Bouygues Telecom and Altice, the parent of local cable
operator Numericable. 
    Separately, Bouygues set the value of its bid for larger telecom rival SFR
at 19 billion euros ($26 billion)on Thursday and said it would raise extra
capital for the business on completion of a deal by spinning it off into a new
listed company. 
        
    AXEL SPRINGER 
    German publisher said it would raise its dividend to 1.80 euros ($2.47) per
share in 2013 from 1.70 euros a year earlier, backed by expectations of rising
revenues and earnings in 2014. 
    
    GEMALTO 
    Global digital security group Gemalto GTO.AS said it expects double-digit
growth in sales and profit from operations at constant exchange rates in 2014.
 
    
    KLOECKNER & CO 
    German steel trader expects to return to a net profit this year,
presentation slides it published on Thursday showed, after it released 2013
financial results. 
    
    JCDECAUX 
    Outdoor advertising specialist forecast a slight increase in first-quarter
organic revenue on Thursday and raised its dividend on last year's earnings by 9
percent. 
    
    BANCA POPOLARE DELL'EMILIA ROMAGNA 
    The Italian mid-size lender said on Wednesday it had posted a net profit
last year of 16.1 million euros from a net loss the previous year of 32.6
million euros. 
    
    BANCA MONTE DEI PASCHI DI SIENA 
    Shares in Italy's third biggest lender soared 20 percent in heavy volume on
Wednesday, prompting speculation the bank's top investor may have found a buyer
for part or all of its stake in the bank. 
    
    BMW 
    The luxury car maker wants to decide by year-end whether to increase
production capacities for its i3 model as advance orders for the electronic
vehicle exceed expectations, Chief Executive Norbert Reithofer told daily Die
Welt. 
    
    YOOX 
    The Italian online fashion retailer expects stable sales growth in 2014 and
a pay off this year from its investment in China, the company's chief executive
said on Wednesday.
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