December 18, 2012 / 7:31 AM / 5 years ago

UPDATE 1-European Factors to Watch - Shares seen up on 'fiscal cliff' progress

LONDON, Dec 18 (Reuters) - European shares were seen opening higher on
Tuesday, boosted by signs that U.S. politicians were nearing a deal to avoid a
"fiscal cliff" of looming spending cuts and tax rises that threaten the health
of the world's biggest economy.
    The differences over how to resolve the fiscal cliff narrowed significantly
on Monday night as President Barack Obama made a counter-offer to Republicans
that included a major change in position on tax hikes for the wealthy, according
to a source familiar with the talks. 
    The latest signs of progress in those U.S. budget talks pushed the S&P 500
to end at its highest level in almost two months on Monday. 
    At 0720 GMT, futures for the Euro STOXX 50 index and for Germany's
DAX were up by 0.6 percent. Futures for France's CAC-40 rose 0.5
percent, pointing to fresh peaks for the cash index.
    "It's hard to be too bearish today when we are likely to see new highs in
the DAX and the CAC," IG Markets' chief market strategist Chris Weston wrote in
a note.
    The DAX reached a 2012 high of 7,627.14 points on Monday, while the CAC hit
a 2012 high of 3,659.10 points on Dec. 13. 
    McLaren Securities managing director Terry Torrison said investors were
focused solely on the U.S. "fiscal cliff" situation at present, with most still
expecting a deal to be reached eventually.
    "They'll go right down to the wire, and then they'll make sure that it gets
through," said Torrison.
    "Going into the new year, the picture is OK. We've had a good run, but I
think there's more to come from it. Equities is still the place to be to get
returns," he added.
    The Bank of Japan was also set to ease monetary policy this week and
consider adopting a 2 percent inflation target no later than in January, sources
said, responding to pressure from next Prime Minister Shinzo Abe for stronger
efforts to beat deflation.    
 MARKET SNAPSHOT AT 0718 GMT                                 
                                            LAST    PCT CHG  NET CHG
 S&P 500                                1,430.36     1.19 %    16.78
 NIKKEI                                 9,923.01     0.96 %    94.13
 MSCI ASIA EX-JP                                     0.03 %     0.19
 EUR/USD                                  1.3166     0.02 %   0.0003
 USD/JPY                                   83.90     0.02 %   0.0200
 10-YR US TSY YLD                          1.775         --     0.00
 10-YR BUND YLD                            1.386         --     0.00
 SPOT GOLD                             $1,702.20     0.27 %    $4.55
 US CRUDE                                 $87.78     0.67 %     0.58
  > 'Fiscal cliff' hopes lift Asian shares, other risk assets 
  > US STOCKS-Optimism about 'cliff' boost market; financials lead 
  > Nikkei hits 8-1/2-month high on LDP win, but utilities fall 
  > TREASURIES-Prices fall as hopes for fiscal deal dims safety bid 
  > FOREX-Yen edges lower, hovers near 20-month low vs dollar 
  > PRECIOUS-Gold struggles to break $1,700/oz, US fiscal talks eyed 
  > METALS-Copper inches up on U.S. fiscal cliff hopes, ETF approval 
  > Brent rises above $108 on hopes for US fiscal cliff fix 
    The healthcare companies struck a deal whereby SkyePharma agreed an $8
million settlement in a dispute with AstraZeneca. SkyePharma also said its
full-year trading had been in line with the company's expectations.
    Britain's healthcare cost-effectiveness watchdog said it may reject Roche
Holding AG's rug Avastin for treating advanced ovarian cancer in combination
with two standard chemotherapy drugs. 
    Deutsche Bank Co-Chief Executive Juergen Fitschen conceded on Monday that
criticism of his bank's culture in the wake of the 2007-09 financial crisis was
justified and he wanted to reform it. 
    French automaker Renault will sign on Wednesday an agreement to build its
first factory in Algeria. 
    Tesco Plc is moving closer to appointing a UK chief executive, which could
come in the early months of next year, the Financial Times reported on Tuesday.
    Saudi Aramco and France's Total will double the capital of their
oil refinery joint venture at Jubail to 7.12 billion riyals ($1.90 billion) as
part of the planned financing for the project. 
    Swiss biotechnology company Actelion said on Tuesday its drug for patients
with severe to chronic plaque psoriasis met its primary endpoint in a mid-stage
    Gulf carrier Etihad is buying a 70 percent stake in Air Berlin's
frequent-flyer programme as the German airline seeks to cut costs and pay down
    Norwegian aluminium producer Norsk Hydro appointed Eivind Kallevik as its
new chief financial officer after Jørgen C. Arentz Rostrup decided to leave the
firm, Hydro said on Tuesday. 
    The oil services company said it expected full-year net profit growth of at
least 15 percent. 
    Seismic explorer PGS expects its profit to rise sharply in 2013 as oil
companies rush to secure capacity and push ahead with offshore exploration, the
firm said on Tuesday. 
    Belgian chemicals and plastics group Solvay said on Tuesday it was
reorganising its soda ash production, with increases to take into account of
market growth in Latin America and capacity cuts in southern Europe.
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