November 11, 2013 / 6:30 AM / in 4 years

Europe Factors to Watch-Shares seen higher on growth prospects

LONDON, Nov 11 (Reuters) - European shares headed for a higher open on Monday, with investors betting that the growing pace of U.S. economic recovery will offset any negative impact of the Federal Reserve’s likely move to cut stimulus.

U.S. stocks rose 1.1 to 1.6 percent in the previous session, while Japanese shares climbed 1.3 percent on Monday after Friday’s strong U.S. jobs data showing the creation of 240,000 jobs last month, much higher than expected 125,000.

The jobs report raised concerns that the U.S. central bank could start trimming its bond buying operations, which have supported equities and helped them to scale new highs, sooner than expected, but investors focused on the positive impact of the strength of the economy.

“Finally markets appear to be reacting rationally to economic data,” Credit Agricole said in a note.

“While the data added further weight to the potential for Fed tapering in December or January, it was also recognised as evidence of a growing economy, and one that barely flinched in the wake of the government shutdown.”

However, investors were expected to stay cautious and gains were likely to be capped on concerns about policy tightening in China, the world’s second-biggest economy, after the release of inflation figures over the weekend.

China’s annual inflation hit an eight-month high of 3.2 percent in October on soaring food costs, but factory output and investment numbers pointed to signs of stabilisation in the economy.

At 0742 GMT, futures for the Euro STOXX 50, Britain’s FTSE 100 , Germany’s DAX and France’s CAC were 0.3 to 0.5 percent higher.

German Bund futures were 9 ticks higher on the day at 141.11.

The pan-European FTSEurofirst 300 index closed 0.1 percent lower in the previous session after falling to its lowest in more than a week. However, the index is still up more than 14 percent so far this year.

Investors focus will be on GDP data later this week from euro zone and from major European countries including Germany and France for hints about the pace of economic recovery in the region after recent positive numbers.

Moody’s move to change its outlook on Portugal’s rating to “stable” from “negative” also highlighted that the region was on a recovery path. -------------------------------------------------------------------------------- > Asian shares, currencies fall on Fed tapering concerns > Dow, S&P 500 end higher for fifth straight week; financials lead > Nikkei rises 1.3 pct on U.S. optimism, exporters outperform > Bond prices slump as job growth tops forecasts > Dollar stands tall after jobs surprise revives Fed taper talk > Gold extends drop as US jobs data spurs taper fears > Copper steadies after robust Chinese factory data > Brent rises towards $106 after Iran talks end without deal

COMPANY NEWS

NOVARTIS

Swiss pharma group Novartis said on Monday it was selling its blood transfusion diagnostics unit to Spain’s Grifols for $1.675 billion. For more click on

DEUTSCHE TELEKOM

Deutsche Telekom on Sunday said it had bought GTS Central Europe for 546 million euros ($729 million) in a deal which hands the German telecom operator a fibre optic fixed-line and infrastructure business in Eastern Europe.

LONMIN

South African platinum miner Lonmin posted a forecast-beating pre-tax annual profit of $140 million on Monday, recovering from a heavy loss last year as both sales and an effort to contain cost increases exceeded its targets.

SHIRE

The London-listed pharmaceutical said on Monday it had agreed to buy ViroPharma for about $4.2 billion to create a leading force in treatments for rare diseases.

VEDANTA

Zambia has revoked the work permit of the chief executive of Konkola Copper Mines (KCM), owned by London-listed Vedanta Resources, in a growing row over plans by the company to cut hundreds of jobs, an official said on Monday.

ERICSSON

Subscriptions for smartphones globally will rise faster than previously thought, almost tripling by 2019 and forcing operators to roll out high-speed networks to cope with surging data traffic, Ericsson said on Monday.

ENI, TOTAL

Kazakhstan’s giant Kashagan oilfield will not be able to restart production before the end of 2013, said the chief executive of French oil company Total, one of the partners in the project along with Italy’s Eni.

TELECOM ITALIA, TELECOM ARGENTINA, BLACKROCK

Investment fund Fintech is close to sealing a deal to buy Telecom Italia’s controlling stake in Telecom Argentina, Argentine newspaper La Nacion reported on Saturday.

NATIXIS

BPCE, the parent group of French investment bank Natixis , will unveil a plan next week to double net income by 2017 to 4 billion euros ($5.35 billion) on the back of cost cuts and cross-selling, two sources told Reuters.

BT, BSKYB

BT has beaten BSkyB to win the right to show Champions League soccer from 2015, in the biggest blow to Rupert Murdoch’s dominant pay-TV operator since it started broadcasting more than 20 years ago.

RSA INSURANCE

RSA has commissioned an independent review of its financial and regulatory reporting processes and controls after it suspended three senior executives at its Irish unit, it said on Sunday.

EIFFAGE

Eiffage stuck to its full-year revenue target on Friday after reporting a 4.8 percent rise in third-quarter sales to 3.8 billion euros ($5.07 billion), helped by higher motorway traffic and a high-speed railway project.

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