Europe Factors to Watch-Shares set to inch up; inflation data eyed

Fri Aug 29, 2014 2:33am EDT

PARIS, Aug 29 (Reuters) - European stocks were set to inch up in early trade
on Friday as investors await inflation figures for the euro zone, which may shed
light on the European Central Bank's next move.
    At 0630 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were up 0.1-0.3 percent.
    Euro zone inflation, due at 0900 GMT, is seen dropping to 0.3 percent in
August, following a surprise dip to 0.4 percent in July, according to a Reuters
poll of analysts.
    The data will be at the center of the ECB's policy meeting next week,
fuelling the debate about whether the central bank should accelerate existing
policy measures to fight the risk of deflation. 
    The Ukrainian crisis was still at the forefront of investors' minds on
Friday after Ukraine's president said Russian troops had entered his country in
support of pro-Moscow rebels who captured a key coastal town. 
    U.S. President Barack Obama spoke by phone on Thursday with German
Chancellor Angela Merkel. The White House said the two agreed the United States
and Europe should consider more sanctions against Moscow. 
    Shares in European mining companies will be in the spotlight again as iron
ore was on track to end August with its biggest monthly fall since May after a
supply glut and a weak steel market dragged prices down to the lowest level
since September 2012.
    Iron ore has fallen 8.7 percent in August and has lost almost 35 percent
this year, among the industrial commodities hard hit by China's slowing economy.
   London copper futures have also dropped, on track for their biggest monthly
loss since March.  
    Investors were also keeping an eye on Iceland's Bardarbunga volcano, where a
small eruption occurred after nearly two weeks of earthquakes in the region but
no volcanic ash has been detected so far. 
    The rumblings at Iceland's largest volcano system have raised worries of an
eruption that could spell trouble for air travel. In 2010, an ash cloud from the
Eyjafjallajokull volcano closed much of Europe's airspace for six days.
    The FTSEurofirst 300 index of top European shares is on track to
record a gain of 1.5 percent in August, its best monthly performance since May.

    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0630 GMT: 
                                         LAST   PCT CHG  NET CHG
 S&P 500                             1,996.74   -0.17 %    -3.38
 NIKKEI                              15424.59   -0.23 %   -35.27
 MSCI ASIA EX-JP                       511.53   -0.13 %    -0.67
 EUR/USD                               1.3163   -0.14 %  -0.0019
 USD/JPY                               103.77    0.07 %   0.0700
 10-YR US TSY YLD                       2.331        --     0.00
 10-YR BUND YLD                         0.875        --    -0.01
 SPOT GOLD                          $1,288.40    -0.1 %   -$1.34
 US CRUDE                              $94.76    0.22 %     0.21
 
  > GLOBAL MARKETS-ASIAN SHARES SLUMP AS UKRAINE TENSIONS FLARE 
  > WALL ST LOSES GROUND ON UKRAINE WORRY; DATA CURBS LOSSES 
  > NIKKEI FALLS ON UKRAINE WOES, BUT HOPES OF DOMESTIC BUYING LIMIT LOSSES 
  > YEN SUPPORTED ON UKRAINE TENSIONS, EURO BRACES FOR INFLATION TEST 
  > PRECIOUS-GOLD STEADY, HEADS FOR MONTHLY GAIN ON UKRAINE TENSION 
  > METALS-COPPER EYES BIGGEST MONTHLY DROP SINCE MARCH ON UKRAINE WOES 
  > BRENT HOLDS ABOVE $102, BUT HEADS FOR 2ND MONTHLY LOSS 
    
    COMPANY NEWS:
    
    TESCO 
    The group slashed its interim dividend by 75 percent on Friday, after tough
operating conditions forced it to cut its trading profit outlook for the year.
 
    
    BERTELSMANN 
    German media group cut its 2014 profit outlook on Friday after the Hungarian
business of its broadcaster RTL  took a hit from a new
advertising tax. 
    
    NESTE OIL 
    Finland's Neste Oil on Friday cut its profit outlook for the full year due
to previously announced hydrogen plant damage at its Porvoo refinery. 
    
    FIAT 
    Italy's Fiat said on Friday that it did not expect the number of
shareholders taking up an offer by the car maker to buy their shares at a set
price ahead of a planned merger with Chrysler to be such that a 500 million euro
cap would be exceeded. 
    
    HERMES 
    The French luxury goods maker said that its full-year operating margin would
be lower than the 32.4 percent achieved last year because of the impact of
exchange rates. 
    
    VIVENDI, TELEFONICA 
    The French media company picked Telefonica for exclusive talks over
the sale of its Brazilian broadband unit GVT, spurning a rival bid from Telecom
Italia. 
    
    ROYAL DUTCH SHELL 
    The oil major has sought permission from the U.S. government to drill in the
Arctic Ocean and is keeping open the possibility that it could drill there next
summer, the Financial Times reported. 
    
    HSBC 
    A U.S. regulator can proceed with lawsuits accusing HSBC Holdings Plc and
Nomura Holdings Inc 8604.T of misleading Fannie Mae and Freddie Mac into buying
mortgage-backed securities that later turned toxic, a federal judge ruled.
 
    
    DEUTSCHE TELEKOM 
    Deutsche Telekom AG sees potential offers which value its T-Mobile US Inc
 unit at $35 a share as being substantially too low, a person familiar
with the matter said on Thursday, countering an earlier report from Bloomberg.
    
    LUFTHANSA 
    Pilots at Lufthansa's Germanwings started a six-hour strike on Friday,
disrupting the travel plans of thousands of people returning from summer
holidays, applying pressure on Lufthansa management in their dispute over a
pension scheme. 
    
        

 (Reporting by Blaise Robinson; Editing by James Regan)
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