January 14, 2013 / 6:16 AM / 5 years ago

Europe Factors to Watch-Stocks set to rise; eyes on TNT

PARIS, Jan 14 (Reuters) - European stocks were set to rise on Monday,
resuming their two-month rally and climbing along with the euro currency as
investors continue to increase their exposure to the region on hopes the worst
of the debt crisis is over.
    Comments from a top Federal Reserve official about the outlook for the U.S.
economy also boosted sentiment on Monday.
    Shares in TNT Express will be in the spotlight after United Parcel
Service said it will withdraw its takeover offer for the Dutch delivery
group as it expects the European Commission to block the acquisition. Shares in
TNT traded in Frankfurt were down 7.4 percent early.
    At 0722 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were up 0.3-0.5 percent.
    The euro gained 0.3 percent at $1.3386 on Monday, up a staggering 2.5
percent in three sessions, rallying in the wake of the European Central Bank
President Mario Draghi's more optimistic tone on the region's economic recovery
late last week.
    The single currency and the region's equities have been strongly rallying in
the past six months, boosted by bold measures from the ECB to resolve the debt
    Sentiment on Monday was also lifted by comments from top Fed official
Charles Evans, who said the U.S. economy is expected to grow by 2.5 percent in
2013, improving to 3.5 percent growth in 2014, and  U.S. unemployment rate would
be 7.4 percent this year, easing to about 7 percent in 2014.
    Evans also said the Fed's decision last year to tie monetary policy to
specific economic conditions should help boost the recovery without letting
inflation take hold, and will provide additional accommodation by assuring
markets that rates will remain low even after the economy perks up.
    Strong central action helped spark a recovery rally in stocks last year, and
investors' appetite for equities continued to improve since the beginning of
    Weekly inflows into equity funds hit a five-year high during the first full
week of January, according to EPFR Global, with inflows from retail investors
reaching their highest level since the third quarter of 2009 and
actively-managed funds recording their biggest inflows since EPFR started to
track them 13 years ago.
    Europe equity funds enjoyed brisk inflows, with U.S.-domiciled funds
extending their inflow streak to 22 straight weeks, EPFR data shows.
    Globally, flows into energy funds reached a 13-week high, while financial
sector funds recorded their sixth straight week of inflows.
    Japanese markets were closed for a public holiday.
 MARKET SNAPSHOT AT 0731 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,472.05     -0 %    -0.07
 MSCI ASIA EX-JP                       560.23   0.41 %     2.26
 EUR/USD                               1.3381   0.31 %   0.0041
 USD/JPY                                89.56   0.45 %   0.4000
 10-YR US TSY YLD                       1.864       --     0.00
 10-YR BUND YLD                         1.572       --    -0.01
 SPOT GOLD                          $1,668.90   0.39 %    $6.46
 US CRUDE                              $94.28   0.77 %     0.72
  > GLOBAL MARKETS-Yen under pressure, Asian stocks subdued 
  > Wall Street ends flat as rally slows, earnings eyed 
  > Yen hits 2-1/2-year low as Japan PM keeps pressure on BOJ 
  > Gold inches up on stronger euro, physical buying 
  > LME copper rebounds; China demand woes limit gains 
  > Brent rises to near $111 on supply worries, econ revival hopes 
    UPS said it will withdraw its takeover offer for TNT Express. Shares
in TNT traded in Frankfurt are down 7.5 percent. 
    Generali's boss Mario Greco vowed to deliver operating results of above 5
billion euros ($6.7 billion) and to improve solvency margins beyond 160 percent
under a new strategy that will hike investments in high-growth markets and rein
in costs. 
    France's Saint-Gobain said on Monday it had entered exclusive
talks with Irish bottle and packaging maker Ardagh Group after
receiving a firm buying offer worth $1.694 billion for its Verallia North
America glass packaging unit. 
    Credit Suisse will cut its bonus pool for 2012 by 20 percent to around 2.3
billion Swiss francs ($2.52 billion), the fourth year in a row the Swiss bank
has slashed payouts, a newspaper reported on Sunday. 
    Swatch Group said on Monday it was buying watch and jewellery brand Harry
Winston HW.TO and its 535 employees for $750 million plus up to $250 million of
net debt to complement its high-end watch portfolio. 
    Spain's Iberdrola SA has halted a plan to sell part of its Scottish
Power unit, saying it had made better than expected progress in a planned 2
billion euro ($2.7 billion) asset sale programme, a newspaper reported.
    The company aims to cut its debt to 6.5 billion euros ($8.7 billion) from
about 7 billion, its Chief Executive Bernd Scheifele told Frankfurter Allgemeine
Sonntagszeitung in an interview. Related news 
    The chairman of Brazil's biggest retailer, Grupo Pão de Açúcar SA, sold 1.5
billion reais ($736 million) in preferred shares on Friday, a source with
knowledge of the transaction said, after the company posted the weakest sales
growth since 2009. Casino is the controlling shareholder of Grupo Pao de

    The European Commission is considering Daimler's request for a six-month
grace period before imposing fines on the carmaker for not using a controversial
new coolant in its cars, Stuttgarter Zeitung reported on Saturday, citing a
spokesman for EU Industry Commissioner Antonio Tajani. He said the Commission
would make a decision "in a few weeks". 
    Separately, German magazine Der Spiegel reported that Daimler will extend
Chief Executive Dieter Zetsche's contract by five years, two years more than

    The business software maker's Chairman Hasso Plattner said SAP's
independence was secured for the medium term as the company was "clearly out of
the speculative zone" it was in a few years ago, according to Handelsblatt
newspaper. Related news 
    U.S. electricity regulators are in settlement talks with Deutsche Bank over
allegations the bank manipulated the California electricity market, staff of the
Federal Energy Regulatory Commission said in a filing Friday. 
    Separately, Moneygram Payment Systems Inc has filed a suit against Deutsche
Bank in New York, demanding at least $34 million in damages related to
investments in residential mortgage-backed securities and collateralised debt
obligations. Deutsche Bank said Moneygram's claim had already been dismissed by
a court in Minnesota, adding it saw the claim as unfounded. 
    Spain's Santander has received Chinese regulatory approval to operate as an
independent car financing company, one of the first foreign banks to get a car
finance licence in the world's largest auto market. 
    Fiat and its U.S. unit Chrysler are set to sign a new agreement with
Guangzhou Automobile Group Co to produce the Jeep vehicle for the
Chinese market, Il Corriere della Sera said on Sunday. 
    There are no talks under way at the moment about changing the ownership
structure at Alitalia, shareholder Maurizio Traglio told La Stampa on Sunday.
   French nuclear company Areva has agreed to pay Niger 35 million euros ($46.71
million) in compensation for delays to its Imouraren uranium mining project in
the north of the desert country, a presidency official said on
    France's newest mobile operator Iliad has fallen behind  schedule
in building its mobile network, having installed 1,779 antennas by the end of
2012,  short of its target of 2,500 antennas, according to Les Echos newspaper.
    France Telecom wants to expand its presence in fast-growing African mobile
markets by entering Benin, Togo, Burkina Faso and Mauritania and signing
management contracts with operators in Libya and Algeria.
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