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European Factors to Watch-Shares set to bounce, eyes on ECB
February 6, 2014 / 6:35 AM / 4 years ago

European Factors to Watch-Shares set to bounce, eyes on ECB

PARIS, Feb 6 (Reuters) - European stocks were set to rise on Thursday,
bouncing back from a steep two-week selloff and tracking gains in Asia, though
the rebound could be limited ahead of a European Central Bank meeting later in
the day.
    At 0721 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were up 0.2-0.4 percent.
    Following a recent surprise fall in inflation, pressure has risen on the ECB
to prevent the euro zone from slipping into deflation. 
    While most money market traders expect the central bank to keep interest
rates on hold at the meeting, some speculate it could use other ammunition to
combat falling inflation. The Bank of England is also set to meet on Thursday,
with no changes expected to policy.
    Investors were also reluctant to take fresh positions ahead of Friday's U.S.
monthly jobs report. According to a Reuters' poll of economists, non-farm
payrolls are expected to have increased by 185,000 last month, snapping back
from a three-year low in January, which could ease investors' worries about the
pace of economic growth in the world's biggest economy. 
    The FTSEurofirst 300 index of top European shares has tumbled 6
percent in the past two weeks, its sharpest pull-back in seven months, a slide
sparked by tepid U.S. and Chinese manufacturing data as well as concerns over
the impact of reduced stimulus from the U.S. Federal Reserve on emerging market
assets.
    "The bears seem to have reached an exhaustion point and markets appear to
have bottomed out for now," Capital Spreads trader Jonathan Sudaria wrote in a
note. "Whether this is due to the emerging market fears being fully priced in or
just both the bulls and bears retreating to the sidelines ahead of today and
tomorrow's risk events is unclear."
    The recent sharp swings in emerging market currencies has started to hit
European companies, with Germany's HeidelbergCement warning that
exchange rate fluctuations would continue to impact its earnings this year.
 
    The banking sector will be in the spotlight after Credit Suisse 
missed expectations with a marginal uptick in fourth-quarter net profit, and its
shares were indicated to pen 1.5 percent lower. 
    "The earnings season hasn't been that bad so far, but people that have been
hoping for a real pick up in revenues will have to wait. We're not there yet," a
Paris-based equity and exchange-traded fund trader said.
   
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0721 GMT: 
                                        LAST         PCT CHG    NET CHG
 S&P 500                                1,751.64      -0.2 %    -3.56
 NIKKEI                                 14,155.12    -0.18 %    -25.26
 MSCI ASIA EX-JP                        439.13        0.97 %    4.2
 EUR/USD                                1.352        -0.09 %    -0.0012
 USD/JPY                                101.47        0.04 %    0.0400
 10-YR US TSY YLD                       2.675        --         0.01
 10-YR BUND YLD                         1.637        --         0.00
 SPOT GOLD                              $1,258.10     0.04 %    $0.45
 US CRUDE                               $97.61        0.24 %    0.23
 
  > GLOBAL MARKETS-Asian shares take step forward, eyes on ECB 
  > US STOCKS-Wall St ends lower, but able to bounce off support 
  > Tokyo's Nikkei share average closes down 0.18 pct 
  > FOREX-Euro steady before ECB decision; Aussie up on strong data 
  > PRECIOUS-Gold holds up on safe-haven bids, cautious stocks 
  > METALS-Copper bides time near 2-month lows, growth hopes support 
  > Brent steady above $106; premium to U.S. crude narrows 
    
    COMPANY NEWS:
    
    CREDIT SUISSE 
    The Swiss bank missed expectations with a marginal uptick in fourth-quarter
net profit after increased legal costs arising from U.S. probes into alleged tax
evasion and the sale of mortgage-backed bonds. 
    
    SANOFI 
    The French drugmaker posted slightly better-than-expected profit in the
fourth quarter and predicted earnings would improve further in 2014, helped by
growth in its diabetes and rare diseases units, and in emerging markets.
 
    
    VODAFONE 
    Vodafone said it was confident its revenue would start to improve due to the
take up of faster 4G services, after reporting another sharp fall in quarterly
organic service revenue. 
    
    ASTRAZENECA 
    The pharma group expects earnings to continue to fall in 2014 as generic
competition to its popular heartburn and ulcer drug Nexium takes a big bite out
of U.S. profits from May. 
    
    AKZONOBEL 
    The firm reported slightly higher-than-expected fourth-quarter earnings on
Thursday and said it was on track to meet its 2015 targets even though tough
economic conditions and volatile exchange rates are expected to continue this
year. 
    
    HEIDELBERGCEMENT 
    The cement maker warned on Thursday that exchange rate fluctuations would
continue to impact its earnings this year after reporting a bigger than expected
decline in fourth quarter operating profit. 
    
    WATCH MAKERS
    Swiss watch exports to the important Chinese market improved in December,
the Swiss watch federation (FH) said on Thursday. Exports of Swiss timepieces to
Hong Kong, their biggest market, were down 1.8 percent in December, after
falling 5.6 percent for the whole of 2013, the FH said in a statement, speaking
of a "gradual recovery". 
    
    VOLVO 
    The world's number two truck maker posted a smaller-than-expected rise in
fourth-quarter core earnings, dented by currency headwinds and lingering costs
for launching new models, and unveiled plans to cut 4,400 jobs in its quest to
boost profits. 
    
    WACKER CHEMIE 
    The German specialty chemicals maker said its core profit fell about 15
percent last year, mainly due to a drop in prices for polysilicon it supplies to
the crisis-ridden solar industry. 
    
    ALCATEL-LUCENT 
    The telecom equipment maker posted a net loss of 1.3 billion euros ($1.76
billion) last year hit by a writedown on its mobile business and restructuring
costs, and said it was in talks to sell 75 percent of its enterprise business to
investment fund China Huaxin. 
    
    TELEFONICA 
    Telefonica is in talks to buy Mexico's Iusacell, Spanish daily El Economista
reported on Thursday, citing unnamed sources. 
    
    HANNOVER RE 
    Germany's Hannover Re stuck by its aim of earning around 850 million euros
($1.15 billion) in net profit this year after securing acceptable margins on
reinsurance contracts it renewed with insurance companies in January. 
    
    TELE2 
    Tele2, which lost a December auction for the mobile spectrum it needs to run
its Norwegian network, is in deal talks with the winner, Access Industries, in a
bid to salvage its local operation, sources told Reuters on Wednesday.
 
    
    SACYR 
    A planned expansion of the Panama Canal, one of the world's most important
shipping routes, was in doubt on Wednesday after talks between the canal
administrator and a Spanish-led building consortium fell apart and work ground
to a halt. 
    
    VINCI 
    Europe's biggest construction and concessions company posted
better-than-expected annual results and forecast revenue would stabilise in
2014, helped by improved motorway and airport passenger traffic, and a solid
construction order backlog. 
    
    FIAT 
    Fiat-Chrysler's pay talks with Italian unions stalled on Wednesday after the
automaker said it could not grant wage increases this year given tough market
conditions. 
    
    ANHEUSER-BUSCH INBEV 
    The world's largest beer maker struck a deal to buy New York microbrewery
Blue Point Brewing Co as it seeks to increase its offerings in the fast-growing
craft-beer segment. 
    
    FRENCH AUTOMAKERS  
    PSA Peugeot Citroen PEUP.PA expects the French and European auto market to
rise between 1 percent and 2 percent this year, Citroen chief Frederic Banzet
said. Banzet added that he expected the car market to grow around 10 percent in
China this year.

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