European Factors to Watch-Higher start eyed on supportive Fed, China data

Thu May 22, 2014 2:40am EDT

LONDON, May 22 (Reuters) - European stocks were seen edging higher at the
open on Thursday, boosted by expectations the Federal Reserve would continue to
support the U.S. economy and by data showing a pick-up in Chinese factory
activity.
    At 0631 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were up 0.3 percent to
0.4 percent.
    Gains may be limited, however, with the indexes facing technical resistances
near multi-year highs hit last week.
    "The market may open higher but I expect the Dax to encounter
resistance at 9,780 (a level corresponding to its intra day high on May 13) and
then trade in a range," Farhan Ahmad, a trader at Tradenext, said.
    Global shares rose overnight after minutes of the U.S. Federal Reserve's
last meeting reassured investors that policy makers would stick to their easy
monetary policy stance. 
    While Fed staff presented several approaches to raising short-term interest
rates, they said the discussion was simply "prudent planning" and not a sign
rate hikes would come any time soon.
    "The minutes...were dovish," investment bank Berenberg wrote in a note. "In
short, the Fed is unlikely to spoil the recovery while inflation is low and
underemployment is high."
    Sentiment on risk assets was further boosted by a private survey showing
China's factory sector turned in its best performance in five months in May,
confounding some of the more bearish on the world's second-biggest economy and
top consumer of metals. 
    Private sector activity data for France, Germany and the euro zone as a
whole, due between 0700 GMT and 0800 GMT was expected to point to a slight
slowdown in the pace of expansion, underpinning market expectations for monetary
policy easing from the European Central Bank next month.

    
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
   
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    SNAPSHOT AT 0640 GMT
    
                                               LAST      PCT CHG   NET CHG
 S&P 500                                   1,888.03       0.81 %      15.2
 NIKKEI                                    14337.79       2.11 %    295.62
 MSCI ASIA EX-JP                             487.84       1.03 %      4.97
 EUR/USD                                     1.3668      -0.13 %   -0.0018
 USD/JPY                                     101.64       0.29 %    0.2900
 10-YR US TSY YLD                             2.562           --      0.03
 10-YR BUND YLD                               1.384           --      0.01
 SPOT GOLD                                $1,293.50       0.16 %     $2.10
 US CRUDE                                   $103.88      -0.18 %     -0.19
 
    

  
  > Asia shares rise on firm China PMI, Fed reassurance            
  > Wall St ends higher after Fed minutes                          
  > Nikkei jumps on improved China PMI, Fed minutes                
  > U.S. bond yields rise after Fed minutes signal slow rate hike  
  > Yen slips as China PMI supports risk appetite, Aussie edges up 
  > Gold steady but quickening fund outflows put prices at risk    
  > London copper climbs on China, U.S. hopes                      
  > Brent steady above $110 on China PMI, lower US stocks          
    
    COMPANY NEWS
    
     SABMiller 
     The maker of beers including Peroni and Miller Lite reported a 1 percent
rise in full-year earnings on Thursday, hurt by foreign exchange rates, and
forecast another year of tough trading. 
    
    UNILEVER 
    Unilever is in advanced talks to sell its Ragu pasta sauce business to
Japanese condiments maker Mizkan Group for more than $2 billion, according to
people familiar with the matter. 
    
    ROYAL MAIL 
    The postal firm, at the centre of a political storm over its privatisation,
posted a 12 percent rise in full-year profit on Thursday, and said its business
was facing tough headwinds from increasing competition. 
    
    SIEMENS 
    Siemens rival General Electric Co expects to close a deal to acquire
the power business of France's Alstom, GE Chief Executive Jeff Immelt
said on Wednesday, adding that his company is still going to "work
constructively" with the French government. 
    Alstom will not give suitor Siemens any more information about its power
business than it has already disclosed to General Electric, a person close to
the French camp said on Wednesday. 
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    ALFA LAVAL 
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after approval from competition authorities. Frank Mohn, which has 1,200
employees and had sales of 3.4 billion Norwegian crowns last year, will be
consolidated as of May 22. 
    
    SANDVIK 
    The Swedish engineering group said late on Wednesday it had completed the
acquisition of Varel International Energy Services Inc with about 1,300
employees and 2013 revenues of about $340 million. The acquisition will be
included in second-quarter results, it said. 
    
    LLOYDS BANKING GROUP, RBS 
    Lloyds Banking Group is joining a class-action lawsuit against
government-owned Royal Bank of Scotland, seeking 420 million pounds ($708.9
million) over the bank's handling of its 12-billion-pound rights issue, the
Herald Scotland newspaper reported. 
    
    RAIFFEISEN BANK INTERNATIONAL 
    Austrian lender reaffirmed its commitment to its lucrative Russian
operations and trimmed its 2014 outlook on Thursday while reporting
first-quarter profit that easily beat market expectations. 
    
    COMMERZBANK 
    The lender is in the final stages of selling its 700 million euro ($957
million) commercial property portfolio in Japan, business daily Handelsblatt
reported, citing financial sources. Negotiations with private equity firm
Pacific Alliance Group were entering the home stretch, the newspaper wrote. 
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    DEUTSCHE BANK 
    Deutsche Bank's co-chief executives will defend plans to raise 8 billion
euros ($11 billion) in equity and to keep expanding investment banking when
management faces shareholders at the company's annual general meeting.
 
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    NORDIC BANKS
    Nordea Equity Research has cut its sector view for Nordic banks and lowered
its recommendations for Swedish banks Swedbank, Handelsbanken
 and SEB. 
    For more on the banks, click on   
    
    BP 
    BP, seeking to limit costs related to the 2010 Gulf of Mexico oil spill,
said it would ask the U.S. Supreme Court to review whether it must pay some
businesses for economic damages without proof that the spill caused such losses.
    

 (Reporting By Francesco Canepa; Editing by Sunil Nair and Lionel Laurent)
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