September 27, 2013 / 6:28 AM / 4 years ago

UPDATE 1-European Factors to Watch-Equity index futures edge higher

LONDON, Sept 27 (Reuters) - European equity index futures crept higher on Friday, although investors expected a lack of progress in ongoing U.S. budget and debt negotiations to keep indexes in a tight trading range.

The Euro STOXX 50 futures were up by 0.2 percent by 0615 GMT, while Germany’s DAX futures and France’s CAC both edged up by 0.1 percent.

German bund futures opened 5 ticks lower.

Global stock markets scaled fresh heights after the U.S. Federal Reserve on Sept. 18 decided to keep its economic stimulus programme of bond-buying - a plan known as “quantitative easing” (QE) which has boosted equities - unchanged for now.

But investors have since used issues such as talks in the United States to increase the country’s borrowing authority as a cursor to trim back equities in order to cash in profits on the earlier rally.

U.S. House of Representatives Republicans on Thursday refused to give in to President Barack Obama’s demand for straightforward bills to run the government beyond Sept. 30 and to increase borrowing authority to avoid a historic default.

Political uncertainty in Italy has also held back European equities, with Italy’s FTSE MIB equity index falling on Thursday after renewed threats from former premier Silvio Berlusconi’s centre-right party to pull out of the country’s fragile coalition government.

Hendrik Klein, head of high frequency trading and fund management firm Da Vinci Invest, said he had recently sold out of the Euro STOXX 50 at 2,900 points and the DAX at 8,650 points, but was keeping a longer-term bullish view on European equities.

The FTSEurofirst 300 hit a fresh 5-year high of 1,274.59 points on Sept 19, but has since edged back by around 1.3 percent and has traded within a 15-point trading range. The index remains up by 11 percent since the start of 2013.

Central Markets chief strategist Richard Perry said that while U.S. politicians had historically always managed to reach an agreement to avert any default, equity markets would not make much headway until a new U.S. debt deal was reached.

“History shows that these decisions tend to go right down to the wire, and typically the decisions are always in favour of the markets,” he said.

“However, the markets will remain on edge while the battle ... rumbles on, so expect markets to remain range bound until the decision.” -------------------------------------------------------------------------------- > GLOBAL MARKETS-Asian shares firm, but U.S. budget impasse constrains

> Wall St ends 5-day losing streak on job data; Nike up after the bell > Nikkei eases in choppy trade, Abe’s tax plan in focus > TREASURIES-Prices edge lower as jobless claims near six-year low > FOREX-Dollar steady, focus on U.S. budget brinkmanship and Fed > PRECIOUS-Gold headed for 5th straight weekly fall on stimulus outlook > METALS-London copper edges up on China demand, steady on week > Brent slips below $109 on easing Mideast tension, on track for 3rd weekly drop



Nestle SA, the world’s largest food company, is looking to divest its PowerBar energy bars, a pioneer of sports nutrition products, according to four people familiar with the matter.


The carmaker said Thursday it signed a 9 billion euro credit facility, taking advantage of favourable market conditions to replace an existing, smaller loan.


Air France-KLM voted against a proposal for a 100 million euros capital increase at troubled Alitalia on Thursday, a source close to the matter said.


Rival Nike Inc enjoyed big sales in gains in North America and Europe last quarter and benefited from fewer markdowns, helping it report a stronger-than-expected quarterly profit on Thursday.


Banco Santander Brasil SA will modify its capital structure and pay shareholders a one-off dividend of 6 billion Brazilian reais ($2.73 billion), allowing it to return funds to its Spanish parent which has been suffering losses.


French steel-tube maker Vallourec said a weak Brazilian real and reduction in demand for new oil and gas wells in Brazil could dent growth in revenue and EBITDA margin this year.


China’s Shuanghui International Holdings Ltd will reduce its stake in Spanish packaged meats company Campofrio to less than 30 percent from 37 percent within three months, the company said in a regulatory filing on Friday.


Royal Dutch Shell Plc reported it had issued an “all-clear” following a propane leak at its Sarnia manufacturing site in Ontario, according to the Sarnia-Lambton Network Alert System.

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