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European Factors to Watch-Shares set to gain for 7th straight session
April 2, 2014 / 5:40 AM / 3 years ago

European Factors to Watch-Shares set to gain for 7th straight session

LONDON, April 2 (Reuters) - European stocks were seen rising on Wednesday, with a top share index set to gain for the seventh straight session, buoyed by further evidence of a pick-up in economic growth in the United States and signs of increased merger and acquisition activity in Europe.

At 0635 GMT, futures for the Euro STOXX 50, Britain’s FTSE 100 , Germany’s DAX and France’s CAC were 0.2 percent to 0.4 percent higher.

The pan-European FTSEurofirst 300 has rallied for six straight sessions, gaining 3.7 percent over that period and leaving the index just 0.8 percent off a 5-1/2-year high hit in February.

Helping gains has been a brighter picture for U.S. growth. On Tuesday the Institute for Supply Management (ISM) said its index of U.S. factory activity rose to 53.7 in March, up slightly from February, accelerating for a second straight month, helping stocks around the world to rally.

It is the latest U.S. data release to point to underlying strength in the U.S. economy after a string of underwhelming weather-affected releases following a cold snap over the winter.

In what is a thin day for European data and corporate releases, the U.S. durable goods orders and ADP National employment numbers will be in focus, as investors attempt to gauge the strength of growth ahead of the closely followed non-farm payroll release on Friday.

Traders will also keep an eye on producer price data from the euro zone, out at 0900 GMT, ahead of a meeting of the European Central Bank on Thursday, with traders saying that signs of deflation may prompt the ECB to ease policy as soon as this week, though signs that weaker prices may be temporary has fostered the view that the central bank will hold steady.

On Monday data showed euro zone inflation hit its lowest level since November 2009 in March, a shock drop that supported the case for the ECB to take radical action at some point to stop the threat of deflation in the currency bloc.

“All the pressure is still downwards, as far as inflation is concerned for the EU, and nothing really has happened that has made us believe that it’s being tackled effectively,” Alastair McCaig, analyst at IG, said.

“The fact that the inflation figure was lower and worse than expected just re-emphasized the fact that (ECB President Mario Draghi‘s) timeline for being able to waffle has come to an end.”

Mergers and acquisitions could continue to drive individual stocks in the market.

Finnish engineer Metso could retrace some of the 19 percent surge it saw in the previous session after Finland’s state investment fund said it oppose a takeover approach by Weir.

Meanwhile French conglomerate Bouygues turned up the heat in its battle for control of Vivendi’s telecom unit SFR on Tuesday by extending its offer to April 25 from April 8 and presenting a 500 million euro ($689 million) break-up fee.

Europe bourses in 2014: link.reuters.com/pad95v

Asset performance in 2014: link.reuters.com/rav46v ------------------------------------------------------------------------------ > GLOBAL MARKETS-Asian shares build gains, yen hits 10-week low > US STOCKS-S&P 500 closes at record after manufacturing data > Nikkei hits 3-wk high on US data, Renesas jumps on Apple news > TREASURIES-Long-dated Treasuries yields higher on U.S. data > FOREX-Yen extends slide as equities rally, euro firms > PRECIOUS-Gold nudges up; China demand rises > METALS-Copper hits more than 3-week high after Chile quake > Brent holds above $105, inventory data in focus

COMPANY NEWS

AUTOS

Volkswagen U.S. March auto sales were down 2.6 pct year-on-year. Audi sales rose 7.5 pct, Porsche sales rose 9.2 pct and Mercedes-Benz sales rose 11 pct. BMW Group said sales rose 7.9 pct.

Separately, the United Auto Workers (UAW) on Tuesday asked a U.S. agency to stay an April 21 hearing related to a mid-February union vote it lost at a Tennessee Volkswagen plant, citing what it called new evidence of collusion between Republican lawmakers and anti-union groups.

Also, Volkswagen has applied to set up its first plant in Thailand, Bloomberg reported late Tuesday citing people familiar with the matter.

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BP

The oil major is ceasing production at its Bulwer Island refinery in Brisbane, Australia by mid 2015, blaming competition from new mega-refineries in Asia that are cheaper to operate.

GLAXOSMITHKLINE

The company’s AIDS drugs business is to add one of its latest HIV medicines to a patent pool - cutting its future price for developing countries and pooling intellectual property rights.

ANGLO AMERICAN

The chief executive of Anglo American, one of the world’s largest diversified miners, said divesting the strike-afflicted platinum division could be an option if it does not perform as well as the others.

HSBC

HSBC has made some progress in improving its anti-money laundering program as required by a 2012 deferred prosecution agreement with the U.S. Justice Department, but there remains “much work to be done,” federal prosecutors said in a Tuesday court filing.

VINCI

The construction and concessions company said it had won a contract worth around 850 million euros to design and build a section of a new highway on the outskirts of Doha, in Qatar.

BNP PARIBAS

Twelve large banks have been sued in a consolidated antitrust lawsuit by investors who claim they conspired to rig prices in the roughly $5.3 trillion-a-day foreign exchange market.

DEUTSCHE BOERSE

A U.S. grand jury is probing whether Deutsche Boerse’s Clearstream Banking SA unit took any steps to benefit Iran and its central bank, according to a court filing in a case that stems from the 1983 bombing of the U.S. Marine barracks in Beirut.

The exchange operator said trading volumes at the Eurex Group derivatives unit fell 5.6 percent between January and March compared with the same period a year earlier.

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DEUTSCHE POST

Deutsche Post, the world No. 1 postal and logistics company, unveiled medium-term financial targets through 2020, forecasting that operating profit will grow by an average of more than 8 percent a year.

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LUFTHANSA

Lufthansa pilots plan to start a walkout. The airline has cancelled 3,800 flights for April 2-4 due to the strike.

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PUBLICIS

A federal judge in Manhattan has denied a motion to grant class status to a lawsuit accusing the French advertising company of discriminating against women in pay and promotions. (Reporting by Alistair Smout; Editing by Atul Prakash)

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