LONDON Aug 21 European stocks were set to open flat to higher
on Wednesday, taking their cue from gains on Wall Street and as a key index
found technical support, although appetite for shares was sapped by expectations
of an upcoming reduction in U.S. monetary stimulus.
Futures for the Euro STOXX 50, Britain's FTSE 100,
Germany's DAX and France's CAC were between flat and 0.2 percent
higher at 0625 GMT.
The euro zone's Euro STOXX 50 has shed 2.6 percent in the past
week as the market started to factor in the increasing chance of a reduction to
the Federal Reserve's equity-friendly asset purchase programme in light of
stronger U.S. economic data and more hawkish comments from Fed's officials.
But the index closed off its intra-day low on Tuesday, echoing a rebound in
U.S. equities and having found technical support at 2,769, the 23.6 percent
retracement of the rally since late June.
"Despite yesterday's drop, the dynamic remains bullish from a short-term
point of view," said Philippe Delabarre, an analyst at Paris-based technical
analysis firm, Trading Central, noting the index is further supported by its
August 7 bottom at 2,776 points.
"Therefore, as long as 2,715 is a support threshold (corresponding to the
38.2 percent Fibonacci retracement of the rise between June and August 16), our
target is at least 2,887 points (the index's top in July 2011)."
After the European market close, traders will look closely at the minutes of
the Fed's July policy meeting, due to be published at 1800 GMT, for clues as to
when and by how much the central bank will cut its stimulus programme.
Bond buying schemes by the Fed and other major central banks have driven
investors out of lower-yielding assets and into shares in the past year, helping
the euro zone Euro STOXX 50 index rise roughly 27 percent since June
"Discussions on the impact and efficacy of the current (bond) ...purchases
may offer hints on the size and composition of potential changes as the taper
proceeds," Credit Agricole, which expects a $20 billion reduction to the Fed's
$85 monthly security purchases, wrote in a note.
"We believe (Fed officials) wanted more information before making a decision
but were predisposed to slow the flow of asset purchases sooner rather than
later, barring a significant deterioration in the labor market outlook."
German Bund futures opened 9 ticks lower at 140.52, with investors
wary of making big bets ahead of the release of Fed minutes later in the day.
Germany will sell new two-year bonds on Wednesday, with analysts saying a recent
rise in yields on the back of Fed tapering expectations should lure investors
into the auction.
> Asia stocks slip anew, can't escape Fed fears
> Wall St bounces to end four-day skid; retailers gain
> Nikkei drops to 7-week lows as emerging market tension weighs
> TREASURIES-Yields fall as buyers step in
> Dollar hovers near 6-mth low vs euro, Fed minutes awaited
> Gold inches up, awaits Fed minutes for clues on stimulus
> Copper slips on caution ahead of Fed minutes
> Brent crude slips under $110, eyes on Fed
The world's third largest brewer reported higher first-half earnings than
expected with a surge in profit in developing economies and tight control of
costs in mature markets.
The Danish brewer reported a nearly flat second quarter operating profit
against analysts expectations of a rise, and kept its full-year outlook
Operating profit (EBIT) before special items fell slightly to 3.44 billion
Danish crowns ($615.8 million) in the April to June quarter, compared with 3.47
billion a year earlier and below an average forecast for 3.58 billion in a
Reuters poll of analysts.
Mexican telecoms group America Movil said it had secured the
financing necessary to buy all of the shares in the Dutch telecoms group it does
not already own.
A top Northrop Grumman Corp official said his company was making "a
lot of progress" in talks with the German government about the country's stalled
purchase of four Euro Hawk drones, and what is needed to certify their
VESTAS WIND SYSTEMS
The Danish wind turbine manufacturer is expected to post a drop in second
quarter operating profit to 5.5 million euros ($7.4 million), a Reuters poll of
The proposed tie-up of KPN's E-Plus unit and Telefonica's
Telefonica Deutschland unit, the company's respective German divisions, will
require close scrutiny by the German Cartel Office, the antitrust watchdog's
head Andreas Mundt told Frankfurter Allgemeine Zeitung.
The German cartel office is happy to let the European Commission decide over
the planned takeover of Germany's largest cable provider Kabel Deutschland by
Vodafone, , the antitrust watchdog's head Andreas Mundt told Frankfurter