August 13, 2013 / 5:32 AM / 4 years ago

European Factors to Watch-Shares seen up for 4th day, data in focus

LONDON, Aug 13 (Reuters) - European shares were set to rise for a fourth
straight session on Tuesday, tracking gains in Asia, on expectations that more
U.S. and European data will show a quickening in the pace of economic recovery.
    The euro zone's industrial output data for June is likely to have risen 0.8
percent from the previous month, while Germany's ZEW economic sentiment index
for August is forecast at 40.0, from 36.3 previously. The numbers are due at
0900 GMT.
    In the United States, retail sales data for July will be released at 1230
GMT. Economists expect a 0.3 percent rise, compared with a 0.4 percent gain in
June. Excluding autos, sales are seen up 0.4 percent, versus an unchanged
reading in June.
    "With the U.S., European and UK economies all strengthening, the outlook for
European equities remains excellent," Daniel McCormack, strategist with
Macquarie, said, adding investors will also focus on company earnings for
near-term direction.
    "After roughly three years of steady earnings erosion, we think we will see
earnings upgrades for Europe later in 2013 and earnings in 2014 are likely to
    The second-quarter reporting season is drawing to a close, with nearly
four-fifths of the STOXX Europe 600 companies which have already
announced results, of which 56 have met or beaten forecasts.
    On Tuesday, Germany's top utility E.ON posted a 15 percent drop
in first-half core earnings, hurt by plunging wholesale power prices and a boom
in renewables, while German potash maker K+S reported its
second-quarter adjusted earnings before interest and tax fell 25.7 percent to
162.6 million euros.  
    European shares were expected to trade near their recent 2-1/2-month highs
on Tuesday. At 0623 GMT, futures for the Euro STOXX 50, Britain's FTSE
100, Germany's DAX and France's CAC were 0.3 to 0.5 
percent higher.
    In Asia, The MSCI Asia-Pacific ex-Japan rose 1.2 percent,
while Japan's Nikkei was up 2.6 percent after a report said Prime
Minister Shinzo Abe was considering a corporate tax cut to help offset the
impact of a planned two-stage increase in the sales tax. 
    In the bonds market, German Bund futures opened 33 ticks lower at
141.90 on expectations that upcoming data will show an improvement in the euro
zone's economic outlook.
     MARKET SNAPSHOT AT 0622 GMT                                 
                                                LAST    PCT CHG   NET CHG
     S&P 500                                1,689.47    -0.12 %     -1.95
     NIKKEI                                13,867.00     2.57 %    347.57
     MSCI ASIA EX-JP                          523.81     1.19 %      6.18
     EUR/USD                                   1.331     0.09 %    0.0012
     USD/JPY                                   97.41     0.54 %    0.5200
     10-YR US TSY YLD                          2.632         --      0.01
     10-YR BUND YLD                            1.726         --      0.02
     SPOT GOLD                             $1,334.74    -0.08 %    -$1.05
     US CRUDE                                $106.36     0.24 %      0.25
  > Japan shares rise, yen slips on tax report; gold near 3-wk high  
  > Dow, S&P 500 end lower; Nasdaq lifted by BlackBerry, Apple              
  > Nikkei rises 2 pct led by exporters, corporate tax cut report           
  > U.S. bonds fall in light trade, data in focus                         
  > Dollar edges up ahead of data, yen falters on corporate tax cut report 
  > Gold eases after sharp jump, still near 3-week high                   
  > London copper near 2-mth high on China growth prospects              
  > Brent steady under $109, eye on Libya and U.S. data                    
    Germany's top utility E.ON EONGn.DE posted a 15 percent drop in first-half
core earnings, hurt by plunging wholesale power prices and a boom in renewables
that has pushed many of its power plants into the red. 
    The German potash miner reported its second-quarter adjusted earnings before
interest and tax fell 25.7 percent to 162.6 million euros, in line with a
Reuters poll estimate of 165 million euros. 
    The U.S. Food and Drug Administration approved Tivicay, GlaxoSmithKline'S
drug targeted at HIV-1, the most common strain of the virus that causes AIDS.
    Barring bad weather in the next two months, France's champagne production is
forecast to jump by 56 percent this year, a bright spot in an otherwise rough
period for wine growers. The northern French region produces champagne for LVMH
and also Laurent-Perrier, Vranken Pommery and Pernod Ricard
    The U.S. commodities market regulator has subpoenaed at least two metals
warehousing firms, including Glencore, seeking documents and
communications from the last three years as an inquiry into complaints about
inflated metals prices gathers steam. 
    A Glencore Xstrata unit will eliminate as many as 920 jobs and cut the
budget for its delayed $5.9 billion Tampakan copper-gold mine project in
southern Philippines because it could not guarantee the start of production by
    Britain's BAE Systems is gearing up for strong growth in commercial and
international orders for its wide range of electronic systems, and expects that
to help offset declining military spending in the United States and Europe.
    German steelmaker ThyssenKrupp may end up not selling its loss-making
Brazilian steel mill, the Wall Street Journal reported on Monday, citing people
familiar with the negotiations. 
    German automotive parts supplier Leoni raised its full-year revenue target
slightly after reporting quarterly turnover breached the 1-billion-euro mark
($1.33 billion) for the first time ever. 
    Takeover talk sparked by activist European hedge fund Cevian Capital
disclosing a 5.1 percent stake in the security firm helped lift company's shares
on Monday, according to various newspaper market reports.
Austrian oil and gas group OMV reported a steeper-than-expected drop in
second-quarter underlying profits on Tuesday on lower sales volumes and crude
prices, a weak dollar and write-offs.
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