(Adds company news, updates futures prices)
LONDON, May 28 European equities are expected to open flat to
slightly higher on Wednesday, with another record high set by the U.S. S&P 500
index following strong economic data and hopes of further policy easing
by the European Central Bank improving sentiment.
Data on Tuesday showed that orders for long-lasting U.S. manufactured goods
unexpectedly rose in April, home prices advanced more than expected in March and
consumer confidence rose to near its highest since 2008.
At 0637 GMT, futures for the Euro STOXX 50, Germany's DAX
and France's CAC were flat to 0.3 percent higher. Futures for Britain's
FTSE 100 were up 0.1 percent at 6,834.50 points.
"On the technical side, starting from a low of 6,452 in April, the FTSE 100
futures embarked on its current upward movement, elevating it to annual tops at
6,880 in mid-May '14 with several buy signals," Commerzbank said in a note.
"Based on the resulting slightly overbought technical conditions, this has
been followed by a normal, trend-confirming flag consolidation. The Future has
now moved out of this flag upwards with a trading buy signal. This indicates a
continuation of the upward movement and a new test of the annual highs."
The pan-European FTSEurofirst 300 index closed 0.2 percent higher
at 1,378.82 points on Tuesday after climbing to its highest since early 2008,
while Germany's DAX rose 0.5 percent after setting a new record high.
The DAX is just about 60 points away from the 10,000 mark.
The market was supported by hopes of a policy response from the European
Central Bank (ECB) at its June 5 meeting. ECB President Mario Draghi said on
Tuesday it was aware of the risks from prices remaining too low for too long and
it was equipped to get inflation back to its target again.
Investors will keep a close eye on the stock of Dutch supermarket chain
Ahold, which posted a first-quarter operating profit below analyst
expectations as margins fell in the United States and the Netherlands, the
group's main markets.
Europe bourses in 2014: (link.reuters.com/pad95v)
Asset performance in 2014: (link.reuters.com/rav46v)
MARKET SNAPSHOT AT 0638 GMT:
LAST PCT CHG NET CHG
S&P 500 1,911.91 0.6 % 11.38
NIKKEI 14670.95 0.24 % 34.43
MSCI ASIA EX-JP 489.94 0.63 % 3.08
EUR/USD 1.3631 -0.01 % -0.0001
USD/JPY 101.89 -0.08 % -0.0800
10-YR US TSY YLD 2.509 -- -0.01
10-YR BUND YLD 1.382 -- -0.01
SPOT GOLD $1,264.39 0.08 % $1.00
US CRUDE $104.16 0.05 % 0.05
> Asian shares, dollar cheer strong U.S. data, Wall St record
> S&P 500 ends at record on mergers, ECB; small caps rise
> Nikkei rises on US data; Mitsui Fudosan dives on share issue plan
> Long-end prices rise for a 2nd day on month-end support
> Dollar clings near 8-week high after rising on upbeat U.S. data
> Gold at 3-1/2 month low on strong US data, weak Chinese demand
> -LME copper steady at near 3-month high; nickel firms
> Brent gains above $110 as U.S. data boosts growth prospects
Germany's Siemens hopes to submit by June 16 at the latest a formal asset
swap offer to France's Alstom that would create two European industry champions,
the head of Siemens France said on Tuesday.
Separately, Siemens could sell a 50 percent stake in household goods company
BSH to private equity or rival Samsung, if partner Bosch does not agree to buy
it soon, German paper Frankfurter Allgemeine Zeitung said.
Dutch supermarket chain Ahold, which makes about 60 percent of its revenue
in the United States where it operates the Giant and Stop&Shop supermarkets,
posted a first-quarter operating profit below analyst expectations, as margins
fell in the United States and the Netherlands, the group's main markets.
German lighting company Osram Licht on Tuesday said it could not meet its
goal of revenue growth exceeding 3 percent in the fiscal year. Osram now expects
revenues to either remain at last year's level, or to increase moderately for
the current fiscal year.
British engineering company Weir Group said it submitted a revised
acquisition proposal for Finnish rival Metso on May 20, but the
approach had been rejected a week later, adding that it would not pursue a
takeover any further at the current time.
The French drugmaker announced a licensing agreement with Eli Lilly
to pursue regulatory approval of erectile dysfunction treatment Cialis for sale
Separately, Britain's healthcare cost-effectiveness watchdog is recommending
Sanofi's new multiple sclerosis drug Lemtrada as a treatment option on the state
health service, it said on Wednesday.
Britain's fraud office has launched a formal criminal investigation into
GlaxoSmithKline, posing a new challenge to the drugmaker, which already faces
claims of bribery in China and four other countries.
ROYAL BANK OF SCOTLAND
Royal Bank of Scotland has become the latest overseas bank to shrink its
business in the United States after announcing it would cut its mortgage trading
business by two-thirds, the Financial Times reported on Tuesday.
Airbus Group completed an overhaul of Europe's largest aerospace group by
changing its name from EADS and reaffirming a pledge to deliver on existing
projects before embarking on risky new ventures.
France's telecom regulator said it would open an inquiry into whether
low-cost operator Iliad was building out its mobile network fast enough to
conform to the coverage obligations required by its licence.
The company said it was branching into medical skin treatments and had
acquired the rights to several skin products from Canadian firm Valeant
Pharmaceuticals International Inc for $1.4 billion in cash.
The French bank expects to reduce its holding in Portugal's largest listed
bank, Banco Espirito Santo, to about 15 percent from 20.1 percent through
dilution in a rights issue by BES, BES said.
The insurer's Pacific Investment Management Co unit on Tuesday said it had
rehired Paul McCulley, a former portfolio manager and top U.S. Federal Reserve
watcher at the bond giant, the latest reshuffle after the high-profile departure
of former chief executive Mohamed El-Erian.[ID: nL1N0OD11W]
Medical Technology group Elekta posted weaker than expected fourth quarter
earnings on Wednesday and said that growth will be around 7-9 percent for the
next fiscal year.
(Reporting by Atul Prakash; Editing by Alistair Smout)