June 11, 2014 / 5:25 AM / in 4 years

European Factors to Watch-Stocks to consolidate after sharp rally

EDINBURGH, June 11 (Reuters) - European stocks were seen opening steady on
Wednesday, consolidating after a three-week rally led several indexes back to
multi-year highs, leaving indexes at risk of a pullback in the short term.
    The pan-European FTSEurofirst 300 ended up 0.3 percent at 1,398.18
points on Tuesday, led by gains in defensive Swiss blue-chips such as drugmaker
Novartis and food giant Nestle. 
    The gains in Europe saw the FTSEurofirst 300 and the Euro STOXX 50
 hit their highest since January 2008 and September 2008
respectively, while the German DAX hit an all-time high.
    However, all three indexes entered "overbought" territory. The relative
strength index (RSI), a widely used momentum indicator, rose above 70 on all
three indexes, which is considered  "overbought" and could signal a pause in the
rally or a pull-back in the short term.
    At 0619 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were between 0.1 percent
lower and 0.1 percent higher.
    "The lack of direction early in the session is probably just a case of
traders taking a breather following a few positive days for equities," Craig
Erlam, market analyst at Alpari, said. 
    "In recent days we have seen the DAX breach, and hold above, 10,000 for the
first time... we're not seeing any significant corrections along the way, with
indices simply taking short breathers before continuing on the path higher."
    A relatively busy corporate earnings calendar could help to provide
direction, after Swedish budget fashion retailer Hennes & Mauritz and
Spanish rival Inditex both posted results that beat forecasts.
    As well as retailers, Italy's Banca Monte Paschi will be in focus,
with the bank's shares jumping 40 percent over two days of a share sale, despite
having not traded.
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,950.79  -0.02 %    -0.48
 NIKKEI                              15069.48    0.5 %    74.68
 MSCI ASIA EX-JP                       493.98  -0.11 %    -0.56
 EUR/USD                               1.3544  -0.02 %  -0.0003
 USD/JPY                               102.30  -0.05 %  -0.0500
 10-YR US TSY YLD                       2.653       --     0.02
 10-YR BUND YLD                         1.429       --     0.02
 SPOT GOLD                          $1,261.00   0.04 %    $0.51
 US CRUDE                             $104.44   0.09 %     0.09
  > GLOBAL MARKETS-Euro under fire in Asia, stocks sit on gains    
  > US STOCKS-Wall St ends near flat; Dow hits record for 4th day     
  > Nikkei bounces as MSCI review supports sentiment, BOJ eyed     
  > U.S. 10-yr treasury yields hit 1-mth high on rate hike focus     
  > FOREX-Euro slips, dented by ECB easing, yield gap vs dollar     
  > PRECIOUS-Palladium slips from 3-1/2-year high; gold steady     
  > METALS-Shanghai zinc jumps 2 pct on improving demand        
  > Brent rises near $110 on expected fall in US gasoline stocks     
    Italian bank Monte dei Paschi's 5 billion euro capital raising caused
confusion on the Milan stock exchange on Tuesday, where the bank's shares have
jumped 40 percent in two days but have not traded. 
    Shares in Italian lender Banca Monte dei Paschi di Siena closed up 19.9
percent on Tuesday at 2.216 euros on the second day of a 5 billion euro ($6.8
billion) share sale, according to Reuters data. 
    The Italian stock market said on Tuesday the blue-chip FTSE MIB index had
closed up 0.33 percent at 22,502 after adjustments made for Banca Monte Paschi
di Siena securities. 
    Swedish budget fashion retailer Hennes & Mauritz HMb.ST said on Wednesday
its sales rose 19 percent in May, easily beating a forecast of 11.5 percent in a
Reuters poll of analysts.
    Spanish fashion firm Inditex reported a smaller drop in
first-quarter profit than forecast on Wednesday 
    A unit of E.ON in Brazil, Enerva, is facing a high double-digit million euro
fine for not bringing the gas power station Parnaiba on stream in time,
Rheinische Post reported.
    Related news 
    Emirates has cancelled an order for 70 of the group's newest aircraft, the
A350 XWB, Airbus said on Wednesday. 
    Separately, Airbus Helicopters is among companies involved in talks for a $2
billion Japanese military transport deal, sources told Reuters. 
    The spirits group named luxury sector specialist Valerie Chapoulaud-Floquet
as the new chief executive of the company, which is grappling with falling
cognac sales due to weak demand in China. 
    Shares in Europe's third-largest catering group will be priced at 14.75
euros in its stock market return on Wednesday, which would allow it to raise at
least 847 million euros to cut debt and fund expansion. 
    Bouygues unit Bouygues Telecom is due to hold a works council meeting on
Wednesday at which management is expected to present its restructuring plan. It
said on May 15 it was looking for an extra 300 million eurosin annual cost
savings by 2016. Union sources have said they fear between 1,500 and 2,000 job
    France's Thales said on Tuesday it closed the acquisition of U.S. carrier
JetBlue Airways' LiveTV unit. 

 (Reporting by Alistair Smout; Editing by Anand Basu)
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