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Europe Factors-Stocks set to rise; eyes on Italy's bond auction
April 12, 2012 / 5:35 AM / 6 years ago

Europe Factors-Stocks set to rise; eyes on Italy's bond auction

PARIS, April 12 (Reuters) - European stocks were set to rise on Thursday,
adding to the previous session's tentative recovery following a week-long slide,
but gains could be limited as investors brace for a key Italian bond auction.	
    At 0610 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were up 0.1-0.5 percent.	
    Italy plans to offer up to 5 billion euros, including its March 2015 BTP
bond and 3 off-the-run issues, with yields expected to rise. 	
    On Wednesday, Italy's one-year borrowing costs doubled in a sale of
short-term bills, fuelling fears over weaker euro zone countries and
highlighting investors' nerves ahead of Thursday's more challenging auction of
three-year bonds.	
    Worries that Spain's budget troubles will spread to Italy and the slow
progress made by Rome on structural reforms have recently reversed a falling
trend for Italy's debt costs, with the 10-year bond yield back
above 5.5 percent.	
    Greece was back in the spotlight on Thursday, after the country called a
snap election for next month, launching a campaign that may produce no clear
winner and threaten implementation of the international bailout plan that saved
the nation from bankruptcy. 	
    The euro zone's blue chip Euro STOXX 50 index has lost about 10
percent over the past three weeks, breaking below its 200-day moving average and
below a trendline that had started in last September, sending a strong bearish
signal.	
    "Equities had become vulnerable, and we're about halfway into this
correction," said Alain Bokobza, head of global asset allocation strategy at
Societe Generale CIB.	
    "But the probability of a serious accident in Spain with debt restructuring
remains very low, and the rising prospect of a third wave of quantitative easing
in the United States -which could be announce in June- prevent us from
developing a gloomy long-term scenario," he said.	
    Bokobza, who has an 'underweight' recommendation on equities overall, is
more positive on Japanese and U.S. stocks than on European stocks, dragged by
the region's brewing debt crisis and the tepid macroeconomic outlook.	
    	
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 MARKET SNAPSHOT AT 0610 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,368.71   0.74 %    10.12
 NIKKEI                              9,524.79    0.7 %    66.05
 MSCI ASIA EX-JP                       512.90   0.38 %     1.92
 EUR/USD                               1.3143   0.26 %   0.0034
 USD/JPY                                80.93   0.11 %   0.0900
 10-YR US TSY YLD                       2.033       --     0.00
 10-YR BUND YLD                         1.700       --    -0.01
 SPOT GOLD                          $1,659.10    0.1 %    $1.65
 US CRUDE                             $102.98   0.27 %     0.28
 	
    GLOBAL MARKETS-Shares dip as Europe debt worry lingers    	
    Wall St rises after five losing days, Alcoa soars         	
    Nikkei up; caution reigns ahead of N.Korea rocket launch  	
    Gold treads water; euro zone caution remains              	
    Copper bounces off $8,000 support, ECB comment boosts     	
    TREASURIES-US bonds steady in Asia ahead of Italy auction 	
    Brent at $120 ahead of Iran talks; Fed comments weigh     	
    	
    COMPANY NEWS:	
    	
    CARREFOUR 	
    Europe's biggest retailer said it would  focus on cutting prices to lure
back consumers as it braced for another tough year as cash-strapped shoppers
reduced spending. 	
    	
    NOKIA  	
    Several banks and brokers have cut their price targets on the shares in the
cellphone maker following the Finnish firm's warning of losses a day earlier,
which sent the stock to its lowest level since 1997. Nomura cut its target to
3.20 euros from 4 euros, while Baird and Canaccord Genuity, both cut their
target to $4 from $5. All three have a neutral rating on the stock. 	
      	
    COMMERZBANK 	
    Commerzbank is seeking shareholder approval which would give it the
flexibility to double the amount of its stock by issuing new shares and
convertible bonds in a move to retain financial flexibility in uncertain
markets. 	
    	
    REPSOL  	
    Repsol's YPF unit in Argentina has seen about a third of its market value
evaporate this year due to investor fears of a possible government takeover as
part of the state's effort to boost energy output. 	
	
    BANESTO  	
    Spanish bank Banesto kicks off the earnings season on Thursday with numbers
that will reveal the toll of the goverment's tough new capital demands to force
banks to deal with rotten property assets. 	
    	
    ENI  	
    Russian gas giant Gazprom and Eni are among 14 firms that have
expressed initial interest to buy Greece's state gas firm DEPA, one of the first
assets to go under the hammer to reduce the cash strapped nation's debt, the
government said on Wednesday. 	
	
    ROCHE  	
    Roche Holding AG sought on Thursday to persuade Illumina 
to discuss its $6.7 billion bid for the genetics firm as a rebound for its key
cancer drug Avastin helped the Swiss drugmaker post solid first-quarter sales.
Roche, in a letter to Illumina shareholders, called its sweetened $51-a-share
offer for the maker of genetic analysis equipment "a more than reasonable
starting point for negotiations."  	
    	
    UNICREDIT  	
    The chairman of German insurer Allianz in Italy and an experienced Italian
manager who sits on the board of Fiat are the front runners to become
UniCredit's next chairman, two sources close to the situation said on Wednesday.
 	
    	
    SIEMENS NOKIA 	
    Nokia Siemens Networks (NSN) will overhaul its management structure,
trimming the 13-member board down to three, Financial Times Deutschland said in
its Thursday edition, citing an e-mail to staff sent out by Chief Executive
Rajeev Suri. Related news

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