European Factors to Watch-Shares seen steady, sentiment subdued

Fri May 16, 2014 2:32am EDT

LONDON, May 16 (Reuters) - Major European equity indexes were seen edging
higher at the open on Friday, finding some technical support after they posted
the biggest daily drop in several weeks on the previous day.
    German travel and tourism group TUI AG was in focus after it
reported a smaller-than-expected quarterly loss and said it was on track to meet
its targets for the next two years. 
    Appetite for shares remained subdued, however, with a drop in U.S. Treasury
yields overnight and a rise in the price of insuring against further jitters on
the stock market - as measured by the U.S. VIX and the euro zone VSTOXX
 volatility indexes - pointing to greater caution among investors.
    At 0627 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were up between 0.3
percent and 0.4 percent.
    Despite Thursday's drop, the FTSE, DAX, CAC and Euro STOXX 50 remain well
above their 50-day moving average, a key momentum indicator. The FTSE and the
DAX were still on track to record a gain for the week, while the CAC was set to
post its first weekly loss in a month.
    "Yesterday's price action has sent a first sign of weakness but the Euro
STOXX 50 cash index remains supported by an internal trend line drawn from May
2013 and by the rising 50-day simple moving average," said Nicolas Suiffet, an
analyst at Paris-based technical analysis firm Trading Central.
    "Thus, the trend remains positive as long as prices are holding above the
support base at 2970, which corresponds to its March bottom and internal trend
line."
    France's CAC recorded its steepest daily fall since late March on Thursday
and Italy's FTSE MIB fell by the most since February 2013 after
weaker-than-expected GDP figures from the both countries.
    "Markets are vulnerable because growth expectations are a little bit too
high," said Michael Hewson, chief market analyst at CMC Markets UK.
    "The gains we've seen in the periphery pretty much price in a recovery there
so any disappointing numbers would cause weakness in those indexes."

    
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0626 GMT
    
    
                                                LAST      PCT CHG      NET CHG
 S&P 500                                    1,870.85      -0.94 %       -17.68
 NIKKEI                                     14096.59      -1.41 %      -201.62
 MSCI ASIA EX-JP                              486.41       0.09 %         0.45
 EUR/USD                                      1.3712       0.01 %       0.0002
 USD/JPY                                      101.55      -0.01 %      -0.0100
 10-YR US TSY YLD                              2.500           --         0.00
 10-YR BUND YLD                                1.314           --         0.01
 SPOT GOLD                                 $1,296.10       0.01 %        $0.10
 US CRUDE                                    $101.85       0.34 %         0.35
 
  
  > Stronger yen hits Japan shares, lower yields pressure dollar 
  > Wall St falls for 2nd day; small caps slide again                   
  > Nikkei tumbles on strong yen; fall in US bond yields raise concerns 
  > U.S. Treasury 10-yr yields tumble to lowest in six months         
  > Euro inches away from lows, fall in U.S. yields hurts dollar      
  > Gold below $1,300; platinum heads for best week in 3 months       
  > Nickel faces 6 pct weekly loss but still up 35 pct this year     
  > Brent holds above $109 on Ukraine tensions                         
    
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 (Reporting By Francesco Canepa; Editing by Anand Basu and Lionel Laurent)
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