Europe Factors to Watch-Shares set to rise; Ukraine eyed

Mon May 12, 2014 2:38am EDT

PARIS, May 12 (Reuters) - European stocks were set to inch higher in early
trade on Monday, tracking a rally on Wall Street where the Dow Jones Industrial
Average ended at a record high, although gains could be limited by
tensions in Ukraine following Sunday's referendum in eastern provinces.
    Pro-Russian rebels declared victory in a referendum on self-rule for eastern
Ukraine, a vote seen as illegal by the European Union, which is prepared to
increase pressure on Russia on Monday by taking steps to extend sanctions to
companies as well as people linked to Moscow's annexation of Ukraine's Crimea
region. 
    About 40 European blue-chips derive more than 5 percent of their revenues
from the Russian market, including Austria's Raiffeisen Bank and
Finnish tyre maker Nokian Renkaat, which respectively generate 26
percent and 21 percent of their revenues in Russia, according to data from MSCI.
    At 0632 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were up 0.2-0.4 percent.
    Shares in mining firms will be in the spotlight after London nickel jumped
nearly 4 percent on supply worries and LME copper hit its highest level in two
months, fuelled by steady buying and short-covering on the LME May contract,
traders said. 
    The euro zone's blue-chip Euro STOXX 50 index, which has gained
3.3 percent since mid-April, has been stuck in a range since late March, halted
by a long-term resistance level representing the 50 percent retracement of the
index's 2007-2009 slump.
    "The index is still moving sideways for now, trying to break above 3,200
points. On the longer term though, the bullish trend is still in place," said
Jose Antonio Gonzalez Ibanez, head of equity technical analysis at
EuroStockScreener, in Zaragoza, Spain.
    On the M&A front, Alstom will be in focus after German Chancellor
Angela Merkel said the government would support a tie-up with Siemens 
if the corporate decision-makers decide that it would make sense.
 
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0634 GMT: 
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,878.48   0.15 %     2.85
 NIKKEI                              14149.52  -0.35 %   -50.07
 MSCI ASIA EX-JP                       478.04   0.59 %     2.82
 EUR/USD                               1.3766   0.07 %   0.0009
 USD/JPY                               101.89   0.04 %   0.0400
 10-YR US TSY YLD                       2.634       --     0.01
 10-YR BUND YLD                         1.465       --     0.01
 SPOT GOLD                          $1,289.20   0.03 %    $0.37
 US CRUDE                             $100.08   0.09 %     0.09
 
  > GLOBAL MARKETS-SHARES OFF TO CAUTIOUS START ON UKRAINE ANXIETY 
  > US STOCKS-DOW ENDS AT RECORD HIGH; APPLE DRAGS ON S&P 500, NASDAQ 
  > NIKKEI SLIPS AS UKRAINE WORRIES CURB RISK APPETITE; OLYMPUS SHINES 
  > FOREX-EURO STABILISES BUT STILL IN THE DOLDRUMS ON ECB THREAT 
  > PRECIOUS-GOLD FALLS ON EURO; UKRAINE TENSIONS STEM LOSSES 
  > METALS-LME NICKEL UP 4 PCT ON SUPPLY WORRIES, COPPER AT 2-MONTH TOP 
  > BRENT CLIMBS ABOVE $108 ON RENEWED UKRAINE TENSIONS 
    
  COMPANY NEWS:
    
    ALSTOM, SIEMENS 
    Chancellor Angela Merkel said the German government would support a tie-up
between engineering firm Siemens and French rival Alstom if the
corporate decision-makers decide that it would make sense. 
    
    BARCLAYS 
    The UK fraud office stepped up its probe into British bank Barclays Plc's
dealings with Qatar, the Financial Times reported on Sunday. 
    
    DEUTSCHE TELEKOM 
    Deutsche Telekom is seeking a breakup fee of more than $1 billion from
Sprint Corp in the event a potential merger with the German firm's
T-Mobile US Inc does not win regulatory approval, the Wall Street
Journal reported, citing people familiar with the matter. 
    
    BOUYGUES 
    The French telecoms operator may lay off more than 20 percent of its
workforce after failing in its bid to take over rival SFR, French newspaper Le
Figaro reported. 
        
    CELESIO AG 
    German drug distributor on Monday said an expected waning of intense price
competition in the German wholesale market should help underpin its underlying
operating profit this year. 
    
    HEINEKEN 
    The world's third-largest brewer plans capital expenditure of 500 million
euros annually in Africa over the next few years to maintain sales growth, a
senior executive told Reuters. 
    
    BRITISH SKY BROADCASTING GROUP PLC 
    British Sky Broadcasting Group Plc said it was in early talks with Rupert
Murdoch's 21st Century Fox over the possible acquisition of its pay-TV assets in
Germany and Italy, Sky Deutschland and Sky Italia, confirming weekend reports.
 
    
    ACYR 
    Spanish constructor Sacyr and Citi's infrastructure fund have put highway
group Itinere up for sale, Expansion reported, citing sources close to Itinere.
The group, in which Citi has a 54 percent stake, is worth 1.3 billion euros, or
4 billion euros including debt, Expansion said.
    Separately, Sacyr is studying the sale of 3-4 percent of its stake in oil
company Repsol and is talks with bank Santander to extend terms on a
2.4 billion euro loan by another three years, El Confidencial reported, citing
financial sources.
    
    ALCATEL-LUCENT 
    The telecom gear maker is focused on its cost saving and repositioning plan
and not on industry consolidation, its chief executive said in a newspaper
interview after rumours this week of a tie-up with Finland's Nokia.
 
    
    AIR FRANCE-KLM 
    The Franco-Dutch airline said passenger traffic rose 3 percent year-on-year
in April, helped by the later timing of the Easter holiday period.
 
    
    UNICREDIT 
    UniCredit has started talks with trade unions over the 7,300 layoffs
envisaged by its 2014-2018 business plan, Il Sole 24 Ore said on Saturday.
 
    
    DEUTSCHE BANK 
    Deutsche Bank has cleared its top management after an internal investigation
into manipulation of the Libor benchmark interest rate, German magazine
WirtschaftWoche reported. 
    
    AXA, BANCA MONTE DEI PASCHI DI SIENA 
    French insurer AXA will take part in Monte dei Paschi's capital increase,
the head of the group's Italian unit AXA Assicurazioni reiterated in an
interview with Sunday's Corriere della Sera. 
    
    BANCA POPOLARE DI MILANO 
    The co-operative lender said on Friday its net profit rose 12 percent in the
first quarter helped by higher interest income and fees as the Italian economy
left behind a two-year contraction but remained fragile. 
    
    E.ON, RWE, ENBW 
    German utilities are in talks with the government about handing over
responsibility for decommissioning the country's nuclear power plants to a
public foundation, two sources familiar with the proposals said on Sunday.
    
    BANCA CARIGE 
    The Carige foundation, the top shareholder in the Genoa-based bank, has
received from the Treasury the authorisation it was awaiting, allowing it to cut
its stake to 19 percent from 43.4 percent, Il Sole 24 Ore said on Saturday in an
unsourced report.
    Italian businessman Andrea Bonomi is readying an offer to buy 20 percent of
Carige from the foundation, the paper said. U.S. hedge funds may buy small
packets of shares and other small holdings could be sold on the market.
 
    
    BMW, SGL GROUP 
    BMW and SGL Group will triple production of carbon fibre to 9,000 metric
tonnes per year, as the German luxury auto maker prepares to expand the use of
lightweight materials in its model range. 

 (Reporting by Blaise Robinson, editing by Tricia Wright)
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