LONDON Feb 11 European stocks were seen edging higher on
Tuesday, set to continue a week-long rebound from six-week lows as investors
looked to the new U.S. Federal Reserve chair to reassure markets over policy.
At 0725 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were all 0.5 percent
The pan-European FTSEurofirst 300 and the euro zone blue-chip
EuroSTOXX 50 are both up 3 percent since hitting their lowest levels
since mid-December last Tuesday.
Janet Yellen will face U.S. lawmakers on Tuesday in her first test as chair
of the Federal Reserve, where some stern Fed critics will want to know how
committed she is to winding down the Fed's monetary stimulus.
While she is not expected to signal any deviation from the "tapering" of
equity-friendly asset purchases, she may indicate that the Fed's forward
guidance of low rates needs tweaking, given that the unemployment rate is near
the central bank's target well before the Fed is inclined to raise rates again.
"Although she is known for her staunch dovish support for ultra easy
monetary policy, there doesn't appear to be any possibility that she will scale
back on the Fed's tapering program as some are speculating," Jonathan Sudaria,
trader at London Capital Group, said in a note.
"The rapid decline in the unemployment rate now sees it hovering just above
the Fed's target level ... However, the main reason for this has been people
dropping out of the labour force, so bulls may be looking for some sort of
're-phrasing' or even lowering of the threshold to bring it more into line with
the real economy."
Recent gains have come despite a slight deterioration in the earnings
season, where around 40 percent of companies have now missed expectations for
either earnings or revenues, up from a third that had missed on an earnings
basis and a quarter that missed on revenues a few weeks ago.
Tuesday is a heavy day for company reports, including a full report from
Barclays, which pre-released earnings on Monday.
Barclays bank said it expects to improve its leverage ratio to at least 3.5
percent by the end of next year as it reduces the size of its balance sheet, and
committed to paying out at least 40 percent of its earnings in dividends.
"Earnings pick up again this morning... (and) Barclays released their
numbers early yesterday, which were a bit below estimates on higher legal
charges," Nick Xanders, who heads up European equity strategy at BTIG, said.
"Earnings continue to be revised down and they have not moved in since 2012
- while the US earnings have been rising."
Europe bourses in 2014:
Asset performance in 2014:------------------------------------------------------------------------------
> Asia shares, gold get leg-up in pre-Fed jockeying
> Wall St closes slightly up; investors look to Yellen
> Nikkei rises to one-week high on soft yen; volume low
> Treasury prices flat as investors await supply, Yellen
> Dollar pulls back before Yellen; Aussie sets 1-mth high
> Gold extends gains to near 3-month high ahead of Yellen
> Shanghai copper sinks to two-month low on slow Chinese demand
> Brent edges toward $109 on optimism Yellen to assure markets
Britain's Vodafone has offered to buy Spain's largest cable operator Ono
from its private-equity owners, two people familiar with the situation said, in
a deal that could top 7 billion euros.
The boards of French cosmetics group L'Oreal and Swiss consumer goods group
Nestle have agreed a deal under which L' Oreal will buy 48.5 million of its own
shares or 8 percent of its capital from Nestle, the companies said on Tuesday.
Separately, L'Oreal's underlying sales growth improved more than expected in
the fourth quarter, helped by solid demand in the Americas and Western Europe,
and strong growth in new markets in Africa and the Middle East.
Glencore Xstrata said on Tuesday its copper production rose 26 percent and
coal output was up 4 percent in the year to the end of December 2013, offsetting
a weaker performance in zinc and lead.
German retailer Metro hopes more stable economic conditions and exchange
rates will help lift profits this year after reporting a dip in first-quarter
earnings largely due to lower real estate income and the strong euro.
The German engineering and services group on Tuesday proposed a dividend of
3.00 euros ($4.09) per share for 2013, unchanged from last year, after adjusted
2013 earnings rose. Poll:
A former senior UBS private banker has agreed to plead guilty in connection
with a criminal indictment for selling offshore tax-evasion services to wealthy
Americans, according to court documents.
Spanish energy company Iberdrola said on Monday it had sold 1.7 percent of
its stake in Portuguese utility EDP since Dec. 31, 2013 and has agreed
to sell a further 2.9 percent by May 7, 2014.
Actelion raised its full-year guidance on Tuesday and said its new heart and
lung drug had seen strong demand in the United States, as it posted full-year
profit that beat expectations.
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U.S. drugmaker Merck & Co has joined the race to make a cut-price
copy of Sanofi's top-selling insulin treatment Lantus, increasing the long-term
threat to the French company's $7 billion-a-year product.
France's third-largest construction and concessions company by sales posted
slightly higher-than-expected 2013 sales, helped by improved traffic on its toll
roads, record bookings of residential homes and construction work on a
high-speed railway in Western France.
French videogames publisher said its full-year operating loss would be at
the higher end of a previously given range, while sales would also be at the
lower end of expectations.