Europe Factors to Watch-Shares set to inch up in thin volumes

Mon May 5, 2014 2:22am EDT

PARIS, May 5 (Reuters) - European stocks were set to inch higher on Monday
in thin volumes as UK markets were closed for a holiday, with gains set to be
capped following soft Chinese manufacturing data.
    At 0613 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were flat to up 0.2 percent.
    The final reading of China's HSBC/Markit purchasing managers index (PMI) for
April came in at 48.1, lower than a preliminary reading of 48.3 but up slightly
from an eight-month low of 48.0 in March. Output and new orders contracted in
April, and new export orders slipped back into contraction after a recovery the
previous month, the survey found. 
    Tensions in Ukraine were also at the forefront of investors' minds, after
pro-Russian militants stormed a Ukrainian police station in Odessa on Sunday and
freed nearly 70 fellow activists. 
    Portuguese equities will be in the spotlight after the country's government
said on Sunday it would exit the three-year 78-billion-euro bailout this month
without a precautionary credit line, as it returns to growth after years of
painful austerity and unpopular reforms.
    The cabinet decision was announced by Prime Minister Pedro Passos Coelho in
a televised address to the nation and means the country will no longer have to
answer to foreign creditors after the bailout ends on May 17. 
    "With a 15 billion euro ($20.80 billion) cash buffer and funding until 2015,
there are few immediately obvious risks in the light of current periphery
sentiment," RBS analysts wrote in a note. "Portugal's lower deficit, relative to
other periphery countries, allied to its large cash buffer, means that supply is
fairly limited for this year."
    Lisbon's PSI 20 stock index has surged 15 percent so far in 2014,
strongly outpacing the broad FTSEurofirst 300, up 2.6 percent over the
same period.
    Shares in Spain's Repsol will also be in focus after El
Confidencial reported on Monday that Mexican state oil firm Pemex has hired
Credit Agricole to sell its stake of just over 9 percent in the oil major.
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
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  MARKET SNAPSHOT AT 0613 GMT: 
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,881.14  -0.13 %    -2.54
 MSCI ASIA EX-JP                       474.48  -0.22 %    -1.03
 EUR/USD                               1.3878   0.06 %   0.0008
 USD/JPY                               101.95  -0.23 %  -0.2300
 10-YR US TSY YLD                       2.586       --    -0.01
 10-YR BUND YLD                         1.450       --     0.00
 SPOT GOLD                          $1,306.49   0.51 %    $6.67
 US CRUDE                              $99.92   0.16 %     0.16
  > GLOBAL MARKETS-Asia shares falter on China PMI, bonds in demand 
  > Wall St dips as Ukraine concern offsets upbeat jobs data 
  > FOREX-Yen hits 2-week high vs dollar on soft China PMI, aussie sags 
  > Gold climbs to 3-week high on Ukraine tensions, short covering  
  > METALS-Shanghai copper climbs to near two-month top after holiday 
  > Brent edges down towards $108 on disappointing China PMI 
    
    COMPANY NEWS:    
    REPSOL 
    Mexican state oil firm Pemex has hired Credit Agricole to sell its stake of
just over 9 percent in Spain's Repsol, El Confidencial reported on Monday,
citing financial sources.
    Separately, Expansion newspaper reported that Spanish businessman Juan
Miguel Villar Mir, chairman of infrastructure firm OHL, has offered
Repsol to become a major shareholder and buy a stake in the company. 
    
    UNICREDIT 
    The bank expected to formally start on Tuesday a procedure to sell its
credit management unit, Il Sole 24 Ore said on Sunday. Five suitors are still in
the run to buy the unit, the paper said. Among those interested are, according
to Il Sole: Prelios together with Fortress, a consortium formed by
Deutsche Bank, Goldman Sachs and TPG, another consortium
formed by CVC-Jupiter and Cerberus and other foreign funds. 
    
    GDF SUEZ, SUEZ ENVIRONNEMENT 
    The French utility GDF and Suez Environnement denied a report that
Spanish group La Caixa would take a stake in the environmental services firm,
replacing lead shareholder GDF. 

    CARREFOUR 
    French retail giant Carrefour SA has begun making plans to exit its India
wholesale operations, the Times of India reported on Saturday. 
    
    BANCA POPOLARE DELL'EMILIA ROMAGNA 
    The bank is mulling a capital increase of up to 800 million euros, Il Sole
24 Ore said on Saturday. A decision should be taken on Tuesday, when the bank's
board meets. 
    
    TECNICAS REUNIDAS 
    Spanish energy contractor Tecnicas Reunidas said on Sunday it had been
awarded a contract worth close to $1.7 billion from state-owned oil company
Saudi Aramco to build a large power complex in Saudi Arabia's southwestern Jazan
Province. 
    
    ADIDAS 
    Adidas AG's failure to narrow the market share gap with Nike Inc 
means shareholders should refuse to back the German company's management at the
annual general meeting, institutional investor Union Investment told German
weekly Frankfurter Allgemeine Sonntagszeitung. 
    
    MERCK KGAA 
    Merck KGaA said it had completed its 1.9 billion euro ($2.63 billion)
takeover of Britain's AZ Electronic Materials, a move Merck expects to
boost its business in Asia.
($1 = 0.7212 Euros)

 (Reporting by Blaise Robinson; Editing by Sudip Kar-Gupta)