European Factors to Watch-Shares set to inch up; eyes on ECB

Tue Sep 2, 2014 2:24am EDT

PARIS, Sept 2 (Reuters) - European stocks were set to rise slightly on
Tuesday, bouncing within a recent tight range as investors await the European
Central Bank's policy decision later this week before chasing stocks higher.
    At 0620 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were 0.2-0.4 percent.
    Trading was expected to be light in the first few hours of trading, until
Wall Street reopens following a long Labour Day weekend.
    Dovish comments by ECB President Mario Draghi in late August sparked market
bets that the central bank is preparing to pump more liquidity into the system,
possibly via purchases of government or corporate bonds, a measure known as
quantitative easing (QE).
    Sources from within the central bank told Reuters last week that new action
at its meeting this Thursday was unlikely but not impossible, and that the
barrier to QE was still "very high". 
    While most market participants do not expect the ECB to take major easing
steps this week, further measures are considered a matter of when and not if in
the face of risks to euro zone growth posed by low inflation as well as the
Ukraine conflict.
    Investors have recently been buying bullish "call" options, ahead of the ECB
meeting, with the ratio measuring the number of negative "put" options versus
bullish "call" options on the euro zone's blue-chip Euro STOXX 50 index
 dropping in the past three weeks, down to 0.93 currently from 2.45
on August 8.
    However, investors also kept a close eye on the recent escalation in the
Ukrainian conflict. Kiev said it had pulled back troops from defending a vital
airport in the east of the country, near the city of Luhansk, where troops had
been battling a Russian tank battalion, and President Petro Poroshenko accused
Russia of "direct and undisguised aggression" which he said had radically
changed the battlefield balance. 
        
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
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  MARKET SNAPSHOT AT 0621 GMT:
                                         LAST   PCT CHG  NET CHG
 NIKKEI                               15668.6    1.24 %      192
 MSCI ASIA EX-JP                       510.27   -0.45 %    -2.31
 EUR/USD                               1.3123   -0.03 %  -0.0004
 USD/JPY                               104.85    0.48 %   0.5000
 10-YR US TSY YLD                       2.368        --     0.02
 10-YR BUND YLD                         0.892        --     0.01
 SPOT GOLD                          $1,281.69   -0.42 %   -$5.35
 US CRUDE                              $95.82   -0.15 %    -0.14
  > GLOBAL MARKETS-ASIAN STOCKS SLIP, EURO AT 1-YR LOW ON ECB DOUBTS 
  > NIKKEI RISES TO 4-1/2 WEEK HIGH ON WEAK YEN, REFORM HOPES 
  > EURO SEES LITTLE REPRIEVE IN HOLIDAY TRADE, AUSSIE EYES RATE CALL 
  > PRECIOUS-GOLD FALLS TO NEAR 1-WEEK LOW ON DOLLAR STRENGTH 
  > METALS-LONDON COPPER DRIFTS NEAR RECENT LOW ON FACTORY SLOWDOWN 
  > BRENT CRUDE STEADY BELOW $103; LIBYA UNREST OFFSETS DEMAND CONCERNS 
    
    COMPANY NEWS:
    
    TELEFONICA, TELECOM ITALIA 
    Telefonica plans to exit Telecom Italia once the Spanish group has
finalised the purchase of Vivendi's Brazilian broadband business GVT,
ending a long-standing shareholding and easing competition concerns in Brazil. 
    
    PSA PEUGEOT CITROEN 
    The carmaker will cut 300 jobs as it reduces output at its Sochaux plant, in
eastern France, starting in November, trade union officials said.
    
    AKZO NOBEL 
    Chief Executive Ton Buechner has been solicited for a deal to buy car paint
coatings company Axalta Coating Systems for more than $7 billion,
Bloomberg reported citing people familiar with the matter. 
    
    ESSILOR, LUXOTTICA 
    Italian luxury eyewear maker Luxottica overhauled its top management
structure after Chief Executive Andrea Guerra left due to rifts with Chairman
Leonardo Del Vecchio, now set to play a more active role at the eyewear group.
    Luxottica looked at a possible deal with France's Essilor but decided not to
pursue it and is no longer considering it, Luxottica's new co-chief executive
said. 
    
    CONTINENTAL, BOSCH 
    The European trade body in China said Beijing is not planning to force
foreign auto parts suppliers operating in the country to form local joint
ventures, dismissing a report last week that had stirred concern among European
firms. 
    
    KERING 
    The French luxury and sportswear group said Christophe Melard, chief
executive of its Sergio Rossi luxury footware and accessories brand, has stepped
down to seek new opportunities outside the group. 
    
    ALSTOM 
    The French turbine and train maker completed the sale of its heat exchange
unit for 730 million euros to German private equity group Triton. 
    
    INGENICO 
    The French payments firm said Mexican bank Banco del Bajio agreed a deal to
use its countertop and wireless payment terminals across Mexico. 
    
    FIAT 
    New car sales in Italy, Europe's fourth-largest car market, fell 0.2 percent
in August from the same month a year ago to 53,191 vehicles, Italy's transport
ministry said on Monday. 

 (Reporting by Blaise Robinson; Editing by James Regan)
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