January 23, 2013 / 6:50 AM / in 5 years

European Factors to Watch-Shares to get earnings boost

LONDON, Jan 23 (Reuters) - European shares were set to rise in early trade
on Wednesday, with a major index seen advancing towards its recent 22-month
highs on expectations of a solid earnings season and an extension of the U.S.
debt limit.
    Fourth-quarter earnings reported so far have broadly cheered investors and
revived hopes the reporting season would turn out to be better than expected.
    Google, the world's No. 1 search engine, reported a jump in revenue
late on Tuesday, while IBM, the world's top technology services company,
reported earnings and revenue that beat estimates.
    In Europe, consumer goods company Unilever reported 2012 underlying
sales growth of 6.9 percent, beating forecasts of 6.5 percent, propelled by
double digit growth in emerging markets. 
    According to Thomson Reuters StarMine, out of 13 percent companies on the
S&P 500 index that have reported results so far, 75 percent have met or
beaten forecasts. In Europe, only 2 percent of all STOXX Europe 600 
firms have announced results, but 86 percent of them have met or beaten
expectations.
    "U.S. earnings to date have proved broadly supportive. In particular, the
technology sector remains a key bellwether, with the news overnight from Google
and IBM both offering reassurance," Keith Bowman, equity analyst at Hargreaves
Lansdown, said.
    "More generally, investors continue to contemplate U.S. debt ceiling
negotiations."
    The stock market could get some support on signals that Republican leaders
in the U.S. House of Representatives would aim on Wednesday to pass a bill
extending the U.S. debt limit by nearly four months. The White House welcomed
the move, saying it would remove uncertainty about the issue. 
    At 0736 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC were 0.1 percent to 0.3 percent higher. Financial
spreadbetters earlier predicted Britain's FTSE 100 to open as much as
0.4 percent higher.
    The FTSEurofirst 300 index of top European shares closed 0.1
percent lower at 1,165.49 points on Tuesday, but hovers just 5 points below a
22-month peak scaled this month. It is up about 23 percent from a low in June
last year.
    On the economic data front, focus will be on the U.S. weekly mortgage index
at 1200 GMT, ICSC/Goldman Sachs chain store sales figures for the week ended
Jan. 18 at 1245 GMT and Redbook's index of department and chain store sales for
January, due at 1355 GMT.
    
     MARKET SNAPSHOT AT 0737 GMT                                   
                                                  LAST    PCT CHG   NET CHG
     S&P 500                                  1,492.56     0.44 %      6.58
     NIKKEI                                  10,486.99    -2.08 %   -222.94
     MSCI ASIA EX-JP                            559.31    -0.38 %     -2.15
     EUR/USD                                    1.3305    -0.11 %   -0.0015
     USD/JPY                                     88.21    -0.55 %   -0.4900
     10-YR US TSY YLD                            1.828         --     -0.02
     10-YR BUND YLD                              1.561         --     -0.01
     SPOT GOLD                               $1,692.20     0.04 %     $0.60
     US CRUDE                                   $96.61    -0.07 %     -0.07
 
    * Asian shares inch higher on improving global confidence    
    * Nikkei heads for third day of decline                      
    * Banks, commodity stocks lift S&P 500 to 5-year high        
    * Yen holds firm after BOJ disappoints; Aussie slips         
    * Gold near 1-month high; economic recovery hopes weigh      
    * Copper drifts on limited China buying;BOJ stimulus supports 
    * Brent slips towards $112,holds on upbeat economic sentiment 
    * Treasuries-Prices up on weaker housing data                
    
    COMPANY NEWS
    BHP BILLITON 
    The world's biggest mining company boosted its iron ore output by 3 percent
in the December quarter, slightly below analysts' forecasts, as it races to
supply more of the raw material to Chinese steelmakers despite signs of a
softening market. 
     
    UNILEVER 
    Consumer goods company Unilever reported 2012 underlying sales growth of 6.9
percent, beating forecasts of 6.5 percent, propelled by double digit growth in
emerging markets. 
    
    BG GROUP 
    The energy firm rose on Tuesday amid rehashed speculation that BP was
running the slide-rule over the company, according to the Daily Mail market
report. 
    
    SIEMENS 
    The group warned that demand for products such as industrial automation and
drive technologies was weakening as it posted a decline in new orders for its
fiscal first quarter. 
    Separately, Italian state-backed financing agency Cassa Depositi e Prestiti
said it is still in talks to buy a stake in Finmeccanica's power
engineering unit AnsaldoEnergia, in which Siemens has expressed interest.     
   
    SAP 
    The business software maker said it expected operating profit for the
current year to reach between 5.85-5.95 billion euros ($7.77-$7.91 billion) at
constant currencies, up from 5.21 billion euros last year. 
    
    NOVARTIS 
    Novartis expects sales to return to growth from 2014 once it has
absorbed the full impact competition from cheaper drugs, and said its
long-standing chairman and former Chief Executive would step down next
month. 
    
    LOGITECH 
    Logitech said it will charge $211 million against third-quarter
earnings for its video conferencing reporting unit. For more, click on: 
    
    SWISS RE 
    Data aggregator Property Claims Service (PCS) upped its insured loss
estimate from superstorm Sandy to $18.75 billion, leaving investors in a
catastrophe bond issued by Swiss Re facing possible losses. For more, click on:
 
    
    BMW  
    Toyota is close to finalising plans announced late in June to
license its fuel cell technology to German ally BMW, an area where it has lagged
rival Mercedes-Benz. 
    
    RWE, E.ON 
    Germany's power grid is adequate in the current winter season as enough
reserve capacities are in place to shield the country from disruptions after it
switched off large parts of its nuclear generation plants. 
     
    SEB  
    The Swedish bank said late on Tuesday it would write off 753 million crowns
($115 million) in its 2012 earnings for the development of an internet bank
system it decided not to use, and that it made a 402 million loss buying back
covered bonds that it replaced with longer-dated bonds. 
    
    JCDECAUX 
    French outdoor advertiser JCDecaux said on Tuesday it had won an 8-year
contract for the entire advertising concession for Madrid's metro network.
Financial terms were not disclosed. 
    
    GDF SUEZ, SUEZ ENVIRONNEMENT 
    French utility GDF Suez and waste and water company Suez Environnement have
signed an industrial and commercial cooperation framework agreement. This
follows confirmation of a December announcement that a pact binding the main
shareholders of Suez Environnement and expiring on July 22, 2013 will not be
renewed.  
        
    SEB 
    French small household equipment maker Seb said on Tuesday that
fourth-quarter sales rose 1.6 percent to 1.323 billion euros. Sales eased 0.5
percent like-for-like.

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