January 4, 2013 / 6:30 AM / 5 years ago

European Factors to Watch - shares to edge down on early Fed exit risk

* Adds further detail, live quotes, company news

    By Francesco Canepa
    LONDON, Jan 4 (Reuters) - European stocks are seen opening slightly lower on
Friday as concerns that the U.S. Federal Reserve may end its asset-buying
programme ahead of time curbed appetite for shares in the run up to key U.S.
jobs data.    
    At 0719 GMT, futures for the Euro STOXX 50 and France's CAC 
were down 0.3 percent, while contracts on Germany's DAX shed 0.2
percent.
    Minutes from the Fed's December policy meeting released on Thursday showed
some voting members of the Federal Open Market Committee were increasingly
worried about the potential risks of the Fed's asset purchases on financial
markets, even if it looked set to continue an open-ended stimulus programme for
now.  
    Justin Haque, a pan-European trader at Hobart Capital Markets said worries
about an early end to the Fed's quantitative easing programme may result in some
market jitters this quarter, although he remained optimistic that the programme
would continue until the end of the year, supporting equity markets.
    "The hawks are beginning to voice their opinion," Haque said. "It's a small
note in the diary for now but we're basically trading off noise, therefore we
should be mindful of that."
    Investors were reluctant to place big bets on equities before key
unemployment data from the United States at 1330 GMT, which will shed light on
the pace of the recovery in the world's largest economy and give an indication
of how much longer the Federal Reserve's ultra-accommodative policy was likely
to last.     
    Data on Thursday showed U.S. private-sector employers stepped up hiring in
December, suggesting the economy was gaining some momentum and the job market
was growing.
    The Fed said last month it would keep interest rates near zero until
unemployment, expected to have stayed steady at 7.7 percent in December, fell to
at least 6.5 percent, and as long as inflation does not rise above 2.5 percent.
    The U.S. central bank's asset-buying policy and ultra-low interest rates
were a key driver behind a 13 percent rally in the pan-European FTSEurofirst 300
 equity index last year. Along with action by the European Central Bank
to calm funding markets, the more hawkish Fed minutes unnerved financial markets
late on Thursday, sending Wall Street stocks to a lower close. 
    It was also seen by some as a cushion for the market in the face of likely
new political tensions in the United States, where lawmakers were due to discuss
cutting government spending and raising the country's debt ceiling over the next
two months.
    "That's what has been holding the market up," Richard Lewis, head of global
equities at Fidelity Worldwide Investment, said.  
    "With that bit of comfort the market can afford to observe what is going on
in Washington with a bit of tranquillity."  
    Lewis favoured U.S. over European equities in light of stronger economic
data on the other side of the Atlantic, as evidenced by recent jobs and housing
data. 
    The FTSEurofirst 300 was at its most "overbought" in three years, its 14-day
Relative Strength Index showed, meaning some short-term investors may start to
take some profit on the index.
--------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0719 GMT:
  
 S&P 500                  1,459.37   -0.21 %      -3.05
 NIKKEI                  10,688.11    2.82 %     292.93
 MSCI ASIA  <.MIASJ000               -0.58 %      -3.28
 EX-JP      PUS>                              
 EUR/USD                    1.3016   -0.23 %    -0.0030
 USD/JPY                     87.82    0.68 %     0.5900
 10-YR US   <US10YT=RR       1.931        --       0.02
 TSY YLD                                      
 10-YR      <EU10YT=RR       1.487        --       0.00
 BUND YLD                                     
 SPOT GOLD               $1,649.54   -0.81 %    -$13.41
 US CRUDE                   $92.22   -0.75 %      -0.70
 

  > GLOBAL MARKETS-Asian shares drop on Fed minutes, dollar gains  
  > Fed minutes short-circuit Wall St rally                        
  > Nikkei hits 22-month high as US cliff averted                  
  > TREASURIES-Benchmark yields hit 8-month high on Fed wariness   
  > Dollar hits 29-month high vs yen; U.S. jobs data awaited       
  > Gold slips 1 pct on Fed minutes; firm dollar                   
  > London copper weakens, U.S. fiscal deal euphoria fades         
  > Brent falls below $112 as Fed minutes weigh                    
    
    COMPANY NEWS
    
    BMW 
    BMW said its U.S. December sales rose 34.8 percent to 43,855 vehicles.
 
    
    DAIMLER 
    Mercedes-Benz USA said sales in December totalled 31,372 vehicles, up 12
percent from the same month last year. 

    VOLKSWAGEN 
    U.S. sales for its namesake brand and luxury brands Audi and Porsche rose
31.5 percent in December. 
    
    PPR 
    The French luxury group is in exclusive talks to sell its Cyrillus and Vert
Baudet children's apparel brands to Alpha Private Equity Fund for an enterprise
value of 119 million euros. 
    
    EADS 
    Airbus looks set to post sales of around 900 aircraft for 2012 and exceed
its target of 580 deliveries after a record month in December, a Reuters
analysis of industry figures showed. 
    
    STRAUMANN 
    Dental implant maker Straumann said on Friday it appointed Marco Gadola as
chief executive as it seeks to improve its performance in increasingly
challenging dental implant markets. 
    
    NOVARTIS 
    Britain's healthcare costs watchdog has given its backing to eye drug
Lucentis after Swiss drugmaker Novartis NOVN.VX offered it at a discount to the
country's National Health Service. 
    
    CREDIT SUISSE 
    Credit Suisse is preparing to offload more risk exposure to staff in its
2012 bonus giveaway but significantly fewer managers will be allowed to join the
latest version of a scheme that has yielded stellar rewards in previous years.
    
    TRANSOCEAN  
    Transocean Ltd agreed to pay $1.4 billion to settle U.S. government
charges over BP Plc's massive Gulf of Mexico oil spill in 2010 and the
rig contractor admitted that its crew on the Deepwater Horizon was partly
responsible.

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