LONDON Dec 13 European shares headed for a steady open on
Friday, with major indexes finding some technical support after a sell-off to
two-month lows on concerns the U.S. Federal Reserve may start trimming its
stimulus from next week.
Futures for France's CAC and the Euro STOXX 50 were flat,
while Germany's DAX futures rose 0.1 percent in early trading.
The euro zone's blue-chip Euro STOXX 50 cash index fell 0.7 percent to
2,928.12 points on Thursday, but found support at its 100-day moving average of
2,926.12. The index's relative strength index (RSI) dropped to 33, indicating it
was very close to "oversold" levels.
A level below 30 suggests that an index is "oversold" and often results in a
bounce back. An RSI above 70 is considered "overbought" and generally triggers a
Analysts, however, said the market would find it difficult to rebound before
the next week's policy meeting of the U.S. Federal Reserve, which could announce
a reduction in its bond-buying operations that have broadly helped equities to
scale new highs this year.
"The Euro STOXX 50 is now testing its 100-day moving average and it is
possible that this will provide support, as it did as recently as August. The
recent sell-off has left it looking short-term oversold, but not to the extent
that a bounce has become inevitable," Bill McNamara, technical analyst at
Charles Stanley, said.
"I would be surprised if traders committed themselves to additional long
positions at this point, just a few days ahead of the Fed meeting. I wouldn't be
surprised to see the index drift back to 2,900 before the buyers were tempted
The pan-European FTSEurofirst 300, which fell 0.9 percent in the
previous session to 1,244.66 points, a level not seen since mid-October, saw its
RSI falling to 30.
Speculation of a cut in Fed's stimulus gathered further momentum after data
showed on Thursday U.S. retail sales rose solidly in November, adding to signs
of a strengthening economy. A reduction in liquidity is generally seen negative
for equity markets.
However, the European stock market's longer-term outlook stayed bullish. A
Reuters poll of over 50 strategists and forecasters, published on Thursday,
predicted the STOXX Europe 600 index to climb 12 percent to a seven-year high by
end-2014, while Germany's DAX was seen surging 10 percent to an
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PSA PEUGEOT CITROEN
General Motors (GM) announced the sale of its entire 7 percent stake
in the French carmaker. It is being priced at between 10 euros and 10.25 euros a
share, traders said.
PSA Peugeot Citroen said on Thursday it took a 1.1 billion euro ($1.52
billion) writedown at its ailing overseas operations and is pursuing a tie-up
with China's Dongfeng Motor Group that would give the French carmaker the time
and cash to pull out of its downward spiral.
The healthcare and chemical conglomerate will launch a strategic partnership
with China's CITIC Trust next week to market agrochemicals in China, a source
close to the deal told Reuters.
German banking regulator Bafin has demanded documents from Deutsche Bank as
part of a probe into suspected manipulation of benchmark gold and silver prices
by banks, the Financial Times reported, citing sources.
Ireland picked a consortium led by Britain's Centrica for a 1.12 billion
euro ($1.5 billion) acquisition of the retail unit of its gas utility Bord Gais,
a major milestone as it prepares to complete its international bailout
Echostar and Vivendi's GVT subsidiary have ended talks to create a
pay-TV joint venture in Brazil. Vivendi said it remained to accelerating the
deployment of GVT's pay-TV business.
Via Varejo SA, Brazil's largest home appliance retailer, priced a share
offering below the suggested range on Thursday, a sign that investors remain
skittish over the outlook for Latin America's largest equity market.
RSA said on Friday its group chief executive, Simon Lee, had resigned after
it issued yet another profit warning as a result of the need to pump money into
its Irish unit, and after recent storms in Europe.