LONDON, Oct 10 European shares were set to snap a three-day
losing streak and rebound from one-month lows on Thursday, with signs of some
progress to end the U.S. fiscal stalemate and avert a possible debt default
improving investors' appetite for equities.
U.S. Republicans were considering a short-term hike in the government's
borrowing authority to buy time for talks on broader policy issues, a Republican
leadership aide said on Wednesday.
"Further to last night's communication between the Republicans and Obama,
markets are set to rise today as their communication gives some level of
confidence in the short term. In the event of a deal being reached, shares may
rally," Tom Robertson, senior trader at Accendo Markets, said.
U.S. President Barack Obama has said he would accept a short-term ceiling
increase as long as no strings were attached. House Republican leaders will
visit the White House on Thursday as the search intensifies for a way to break
Some analysts, however, remained cautious.
"This meeting already looks like a non starter. Although a positive (share
market) start is expected today, traders should be wary about the meeting
resembling a boxing match weigh-in and knocking any optimism about the political
stalemate out for the count," Capital Spreads wrote in a note.
European stock futures rose in early trading, mirroring gains on Wall Street
and in Japan. At 0647 GMT, futures for the Euro STOXX 50, Britain's
FTSE 100, Germany's DAX and France's CAC were 0.6 to 0.7
Mining stocks could gather strength also from a rise in metals prices.
Japan's Nikkei average was up 1.1 percent on Thursday, while U.S.
shares rose 0.1 to 0.5 percent on Wednesday. The
pan-European FTSEurofirst 300 index ended 0.5 percent lower on
Wednesday after hitting a one-month low, but the index is still up 8 percent
A Reuters poll showed on Wednesday European shares were poised to add 4
percent to this year's strong rally, with Germany's top index on course for
another record high as the economic outlook improves.
In Britain, investors will keep an eye on the meeting of the Bank of
England, although the central bank is expected to leave monetary policy
unchanged despite more signs of economic strength as it sticks to its commitment
to keep interest rates on hold while joblessness stays above target.
On the data front, French and Italian industrial output numbers are due at
0645 GMT and 0800 GMT respectively.
In the United States, investors will scrutinise first-time claims data for
jobless benefits for the week ended Oct. 4, due at 1230 GMT, for hints about the
timing of the Federal Reserve's likely to move to trim stimulus measures.
Economists forecast a 310,000 new filings, up from 308,000 in the previous week.
The minutes of the Fed's Sept. 17-18 meeting, released late on Wednesday,
showed the central bank's shock decision last month not to reduce its support
for the U.S. economy was a "relatively close call" for policymakers.
MARKET SNAPSHOT AT 0648 GMT
LAST PCT CHG NET CHG
S&P 500 1,656.40 0.06 % 0.95
NIKKEI 14,194.71 1.12 % 156.87
MSCI ASIA EX-JP 544.37 -0.18 % -0.98
EUR/USD 1.3499 -0.18 % -0.0024
USD/JPY 97.73 0.41 % 0.4000
10-YR US TSY YLD 2.692 -- 0.03
10-YR BUND YLD 1.846 -- 0.04
SPOT GOLD $1,305.31 -0.1 % -$1.28
US CRUDE $102.16 0.54 % 0.55
> Japan shares, dollar rise on hopes of US fiscal breakthrough
> Dow, S&P 500 end modestly higher on hopeful signs in fiscal impasse
> Nikkei hits 1-week high on hopes for progress in U.S. standoff
> TREASURIES-Prices dip as focus remains on Washington
> Dollar bounces back on signs Washington is moving
> Gold drops close to $1,300 on stronger dollar, stimulus worries
> London copper edges off three-week low as deadlock fears ease
> Brent steadies above $109 after steep overnight losses
ROYAL DUTCH SHELL
Shell Nigeria said on Wednesday it had shut down its Trans Niger Pipeline
(TNP) owing to reports of leaks, deferring 150,000 barrels per day (bpd) of
crude oil just 10 days after the pipeline was re-opened.
The company says it has agreed to sell Crosby and Acco to a newly
incorporated company controlled by affiliates of Kohlberg Kravis Roberts & Co
for $1 billion.
British defence contractor BAE Systems said its earnings could be hit by 6-7
pence per share should it fail to reach agreement on a jet deal with Saudi
Arabia this year.
The Nordic region's second-biggest insurer Tryg posted a
smaller-than-expected fall in third quarter pretax profit, aided by cost cuts,
and repeated its full-year guidance.
Swiss fragrance and flavour maker Givaudan confirmed its mid-term guidance,
even as sales fell unexpectedly in the third quarter.
Swiss media group Ringier has made an offer for the Swiss part of Deutsche
Telekom's classified advertising unit Scout24, Handelsblatt reported citing
media sources. Ringier already holds a 50 percent stake in the Swiss company.
France warned it could block a plan by the telecoms company to lay off 900
French workers, but unions and government sources questioned whether the state
would go that far.
Alitalia, in which the Franco-Dutch airline holds a 25 percent stake, needs
a 300-million-euro ($405.5 million) capital increase and a 200-million-euro
credit line from banks to secure its future, a trade union official said after a
meeting with the company.
Uganda said the French oil major and Tullow Oil could be awarded
production licences this month.