LONDON Nov 1 European shares were expected to edge higher on
Friday, with encouraging China factory data and growing speculation that the
European Central Bank could further ease its monetary policy prompting investors
to cautiously buy stocks.
Futures for Britain's FTSE 100 rose 0.3 percent, with the
mining-heavy market seen getting support from stronger metals prices after data
showed the manufacturing sector in China, the world's biggest metals consumer,
grew at its fastest pace in 18 months in October.
However, futures for the Euro STOXX 50, Germany's DAX and
France's CAC were flat to 0.1 percent higher, indicating that investors
were reluctant to place strong bets on the last trading day of the week and
waited for clarity on some major issues.
A surprise slowdown in euro zone inflation has sparked speculation the ECB
may take action to bolster the economy, while the U.S. central bank did not
sound as alarmed about the state of the economy earlier this week as
anticipated, raising concerns a cut in the Fed's bond-buying operations could
begin earlier than the end of March.
"With two of the world's major central banks possibly about to go in
divergent ways, traders have the difficult task of weighing up which will have
the greatest impact on risky assets," Jonathan Sudaria, dealer at Capital
"The less dovish FOMC statement naturally put a downer on the taper trade
but ... signs that the euro zone was hurtling towards deflation and rising
unemployment have perked up those calling for the ECB to start enforcing their
mandate of price stability," he added in a note.
Societe Generale predicted a 25 basis points cut in ECB Refinance rate in
Investors will keep an eye on further data releases, with UK manufacturing
purchasing managers' index for October due at 0928 GMT, U.S. final Markit
Manufacturing PMI for the current month at 1258 GMT and the Institute for Supply
Management's October manufacturing index at 1258 GMT.
> Asian shares sag, dollar up after upbeat U.S. data
> Wall St ends session lower but posts gains for October
> Nikkei up on SoftBank, Panasonic; Sony plunges 10 pct on profit-warning
> Bond prices fall as data offers hope on economy
> Euro buckles as subdued inflation sparks ECB stimulus hopes
> Gold near 2-week lows on stronger dollar, U.S. data
> Copper eyes biggest weekly gain in six, China data supports
> Brent rises above $109; set for biggest weekly gain in 2 months
U.S. government-controlled mortgage company Fannie Mae sued nine of the
world's largest banks, including Deutsche Bank, accusing them of colluding to
manipulate interest rates and seeking more than $800 million of
The head of hedge fund TCI said he is backing the boss of aerospace giant
EADS in his "aggressive" approach to slash costs and grow profit, and expects
management to announce further cuts in its defence unit soon.
ROYAL BANK OF SCOTLAND
Royal Bank of Scotland said on Friday it would create an internal "bad bank"
to manage the run-down of its riskiest assets after the government stopped short
of ordering a full break up.
Spain's Gas Natural Fenosa signed a deal to buy 2.5 million tonnes per year
of liquefied natural gas (LNG) on a long-term basis from the Yamal plant, which
is being developed by Total and Russia's Novatek.
British aircraft parts supplier Meggitt lowered its full-year revenue
guidance after trading over the last four months had been slightly below its