LONDON, March 20 European shares were set to bounce back after
three days of losses on Wednesday on bargain hunting and the European Central
Bank' assurance to provide liquidity to Cyprus, although gains were likely to be
capped by concerns about the contagion effect.
Cyprus's parliament overwhelmingly rejected a proposed levy on bank deposits
as a condition for a European bailout late on Tuesday. The vote, a setback for
the 17-nation currency bloc, brought the Mediterranean island to the brink of
The European Central Bank, which had earlier threatened Cyprus to end
emergency lending assistance for teetering Cypriot banks, said after the vote it
remained committed to providing liquidity within certain limits.
Analysts said the market expect policymakers to eventually resolve the
"I think that they will find a solution, although painful, because the
market is increasing the pressure, as usual," FXCM analysts Nicolas Cheron said.
"But in the meantime, the uncertainty means the bias is negative. As long as
we don't have a solution, there won't be a serious rebound."
At 0741 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC were 0.5 to 0.7 percent higher, a day after the
pan-European FTSEurofirst 300 closed down 0.4 percent and the Euro
STOXX 50 index of euro zone blue chips fell 1.1 percent.
Banking stocks will be in focus as European Union lawmakers are expected to
agree on Wednesday to bar bankers in Europe from getting bonuses bigger than
their salary, introducing the first cap of its kind globally.
Investors will also keep a close eye on the British government's budget,
with the attention focused on whether finance minister George Osborne chooses to
change the remit of the Bank of England in order to provide further stimulus to
The outcome of the Federal Reserve's two-day policy meeting, due to end
later on Wednesday, will also be in focus. Analysts expect the Fed to keep
buying $85 billion a month in mortgage and Treasury bonds to encourage
investment and bolster a weak economic recovery.
MARKET SNAPSHOT AT 0749 GMT
LAST PCT CHG NET CHG
S&P 500 1,548.34 -0.24 % -3.76
MSCI ASIA EX-JP 537.30 0.1 % 0.56
EUR/USD 1.2905 0.19 % 0.0024
USD/JPY 95.32 0.2 % 0.1900
10-YR US TSY YLD 1.920 -- 0.02
10-YR BUND YLD 1.360 -- 0.01
SPOT GOLD $1,612.30 -0.03 % -$0.49
US CRUDE $92.55 0.42 % 0.39
* Cyprus jitters keep euro, Asian stocks subdued
* S&P 500 ends down, but off day's low after Cyprus vote
* Euro steady near 4-month low on jitters over Cyprus
* Gold holds near 3-week high on Cyprus crisis
* London copper comes off 7-month lows
* Prices rise as Cyprus problems spur contagion fears
The bank said mortgage-related lawsuits and regulatory investigations have
forced it to revise downwards its 2012 earnings.
Shipment volumes of the six biggest categories of white goods in the United
States rose 8.0 percent year-on-year in February, figures from the Association
of Home Appliance Manufacturers showed, indicating strengthening demand in the
hard-hit U.S. housing market.
A German court ruled in favour of Nokia on Tuesday, saying some devices made
by Taiwan's HTC infringed on its power-saving patent.
EDF won planning approval from Britain's energy secretary on Tuesday to
build the country's first new nuclear station in almost 20 years.
Roche Holding AG and a buyout group comprising KKR & Co LP and
Hellman & Friedman LLC have joined the bidding for Life Technologies Corp
, a genetic testing company coveted for its advanced diagnostics and
steady cash flow, according to people familiar with the matter.
Volkswagen, which sells more cars in China than any other foreign firm, will
recall 384,181 vehicles there to fix a long-standing gearbox problem, China's
quality watchdog said on Wednesday.