Europe Factors to Watch-Stocks set to drop again; Ukraine eyed

Mon Apr 14, 2014 2:33am EDT

PARIS, April 14 (Reuters) - European stocks were seen falling on Monday,
extending the previous session's sell-off, after further losses on Wall Street
and as tensions in Ukraine flared again.
    At 0625 GMT, futures for the Euro STOXX 50, UK's FTSE 100,
Germany's DAX and France's CAC were down 0.4 to 0.9 percent.
    Ukraine gave pro-Russian separatists a Monday morning deadline to disarm or
face a "full-scale anti-terrorist operation" by its armed forces, raising the
risk of a military confrontation with Russia, while the United Nations Security
Council held an emergency session on Sunday night to discuss the crisis.
 
    "There had been hopes that the situation may have climaxed in the annexation
of the Crimea, but with pockets of pro Russian support springing up all over the
east, and authorities in Kiev looking like they're about to lose their patience
with diplomacy, it's clear that this is only the opening chapter in what could
be formative moment for geopolitical relations," Capital Spreads trader Jonathan
Sudaria wrote in a note.
    Shares in European blue-chips exposed to Russia and Ukraine, such as Finnish
tyre maker Nokian Renkaat, Austrian lender Raiffeisen Bank
International and Danish brewer Carlsberg, have been
underperforming in recent months, hurt by fears of an escalation in violence in
the region as potential further economic sanctions imposed by the West on
Russia.
    French bank Societe Generale late on Friday announced that it had
increased its stake in Russia's Rosbank to 99.4 percent, saying the
country's banking sector had strong growth potential. SocGen had exposure of
22.4 billion euros to Russia at the end of June, according to the European
Banking Authority's (EBA) data. That equated to 15.7 billion euros in
risk-weighted assets. 
    Mining stocks will also be in focus on Monday after Glencore Xstrata
 sold its interest in the Las Bambas copper mine in Peru to a Chinese
consortium in a $6 billion cash deal, making it one of China's largest mining
acquisitions in recent years. 
    On Friday, U.S. stocks sank on Friday, with the biotech and other momentum
stocks again dragging the Nasdaq Composite down 1.3 percent, to close at
3,999.734 points, falling below 4,000 for the first time since early February, a
pull-back fuelled by worries some stock valuations have been overstretched.
    For the week, the Nasdaq lost 3.1 percent, its biggest weekly decline since
June 2012. 
    In Europe, the euro zone's blue-chip Euro STOXX 50 index lost
3.5 percent last week, and tested a key support level representing its 50-day
moving average, at 3,095.58 points. Breaking below the level on Monday would
send a bearish technical signal.
    Despite the recent jitters on Wall Street and simmering tensions in Ukraine,
investors continued to pour money into European equities, attracting more than
$1 billion in the week ended April 9, according to EPFR Global data.
    Spain and Italy equity funds saw over $150 million each in net inflows in
the week, although Germany and UK equity funds suffered $250 million in
redemptions, EPFR data showed.
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
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  MARKET SNAPSHOT AT 0624 GMT:
    
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,815.69  -0.95 %   -17.39
 NIKKEI                             13,910.16  -0.36 %   -49.89
 MSCI ASIA EX-JP                        480.2    -0.55    -2.67
 EUR/USD                               1.3841  -0.31 %  -0.0043
 USD/JPY                               101.54  -0.05 %  -0.0500
 10-YR US TSY YLD                       2.612       --    -0.01
 10-YR BUND YLD                         1.500       --    -0.01
 SPOT GOLD                          $1,326.96   0.68 %    $8.99
 US CRUDE                             $104.11   0.36 %     0.37
  
  > GLOBAL MARKETS-Stocks slip on Wall St gloom, Ukraine tensions 
  > US STOCKS-Nasdaq ends below 4,000 for first time since early Feb 
  > Nikkei slips to new 6-month low on Wall St slide, Ukraine jitters 
  > FOREX-Euro edges back as ecb steps up verbal campaign 
  > PRECIOUS-Palladium extends rally to near 3-year high on supply fears 
  > METALS-Nickel hits 14-mth high on ore export ban 
  > OIL-Brent rises, hovers near $108 as Ukraine crisis WORSENS 
    
    COMPANY NEWS:
        
    GLENCORE XSTRATA 
    The group has sold its interest in the Las Bambas copper mine in Peru to a
Chinese consortium in a $6 billion cash deal, making it one of China's largest
mining acquisitions in recent years. 
    
    SOCIETE GENERALE 
    France's second-largest bank said it had increased its stake in Rosbank
 to 99.4 percent, saying the Russian banking sector had strong growth
potential. 
    
    PSA PEUGEOT CITROEN 
    SA Peugeot Citroen pledged to achieve a 2 percent automotive division
operating margin in 2018 as new Chief Executive Carlos Tavares outlined a
recovery plan for the struggling French carmaker on Monday. 
    
    TELECOM ITALIA 
    Egyptian billionaire Naguib Sawiris is ready to invest $1 billion to $2
billion in Telecom Italia if its biggest shareholder Telefonica pulled out from
the Italian phone group, according to newspaper Il Sole 24 Ore.
    
    FIAT 
    A change in the way it measures currency in Venezuela will cause Fiat unit
Chrysler to take a $130 million charge in its first quarter, Chrysler said on
Friday. 
    
    ALLIANZ 
    The world's largest insurance company plans to increase its investments in
shares and infrastructure projects as it seeks higher returns amid a low
interest rate environment, its chief executive told German daily Tagesspiegel in
a pre-release of an interview to be published on Monday. 
        
    EDF 
    Petr├│leo Brasileiro SA, Brazil's state-controlled oil company
known as Petrobras, agreed on Friday to sell to EDF its 10 percent stake in
thermal power plant Usina Termel├ętrica Norte Fluminense for an undisclosed sum.
 
    
    VIVENDI 
    The media group's Canal+ pay-TV unit said it won rights to continue
broadcasting Champions League soccer matches for the three coming seasons
through 2018. 
    
    THYSSENKRUPP 
    The German steel maker has signed a memorandum of understanding with Saab
 for the sale of ThyssenKrupp Marine Systems AB. 
    
    VEOLIA 
    French transport firm Transdev, a joint venture between Veolia Environnement
and state-owned bank CDC, will propose a new chairman of the board for its SNCM
ferry unit, a source close to Transdev told Reuters. 
    
    REMY COINTREAU 
    The drinks maker signed an amendment and extension to its 255-million-euro
revolving facility with a pool of ten banks. The move provides the group with
more favourable financing terms, with a borrowing cost of Euribor plus 100 basis
points, compared with the previous one at 195 points. 
    
    PSA PEUGEOT CITROEN 
    The carmaker's prospects may be brightening as Europe emerges from a
six-year market slump, but new boss Carlos Tavares still faces long odds as he
prepares to present his recovery plan on Monday, analysts said. 
    
    NESTLE 
    The chairman of Nestle, the world's largest food group, will undergo
treatment for a curable illness but this will not affect his ability to carry
out his job, the company said. 

 (Reporting by Blaise Robinson; editing by Atul Prakash)
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