October 1, 2013 / 5:40 AM / in 4 years

European Factors to Watch-Shares to edge higher, focus on U.S.

LONDON, Oct 1 (Reuters) - European shares were expected to edge higher on
Tuesday after slipping to a three-week low in the previous session, unfazed by a
shutdown of the U.S. government that investors hope will be resolved soon, and
helped by a positive session in Asia.
    The first U.S. government shutdown in 17 years put up to 1 million workers
on unpaid leave from midnight, threatening to hamper an economic recovery that
had been growing in strength. 
    But analysts were optimistic that the two sides would get back to the table
soon, with conservative Republicans facing polls showing they will be blamed for
the shutdown.
    "The U.S. shutdown is a central point for the markets, but as long as the
hope for just a temporary shutdown exists, it will not be a strong burden for
equities," Christian Stocker, equity strategist at UniCredit in Munich, said.
    At 0632 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC were 0.1 to 0.4 percent higher.
    The FTSEurofirst 300 hit a three-week low on Monday, although it
closed off lows on news from Italy that some senators from Silvio Berlusconi's
centre-right party were ready to break away, dealing a blow to his plans to
topple Prime Minister Enrico Letta's coalition government. 
    The FTSEurofirst closed 0.6 percent lower at 1,247.14 points. However the
index rose more than 8 percent during the third quarter despite political
wrangling in the United States.
    "A U.S. government shutdown potentially places more pressure on the
political parties to negotiate a solution with regard to the national debt
ceiling, a more significant issue," Keith Bowman, equity analyst at Hargreaves
Lansdown, said.
    "In addition, news from Asia, particularly Japan, has been positive. The
tankan survey pleased, whilst the government's go ahead on its sales tax appears
to signal confidence in the recovery.
    Japanese big manufacturers' sentiment improved in the three months to
September for a third straight quarter, the central bank's "tankan" survey
showed, while Prime Minister Shinzo Abe said he had decided to raise the sales
tax from April 1 to 8 percent from 5 percent to sustain the country's public
     MARKET SNAPSHOT AT 0631 GMT                                
                                               LAST    PCT CHG   NET CHG
     S&P 500                               1,681.55     -0.6 %     -10.2
     NIKKEI                                14,484.7      0.2 %     28.92
     MSCI ASIA EX-JP                         536.23      0.4 %      2.16
     EUR/USD                                 1.3552     0.21 %    0.0028
     USD/JPY                                  98.12    -0.09 %   -0.0900
     10-YR US TSY YLD                         2.645         --      0.03
     10-YR BUND YLD                           1.786         --      0.01
     SPOT GOLD                             $1,333.6      0.5 %     $6.67
     US CRUDE                               $101.99    -0.33 %     -0.34
  > Dollar steady as U.S. govt shutdown to start                     
  > Dollar firms ahead of U.S. government shutdown deadline                 
  > Nikkei rebounds after strong BOJ tankan; economic stimulus in focus     
  > U.S. bonds edge up as government shutdown looms                       
  > Dollar firms ahead of U.S. government shutdown deadline               
  > bides time as U.S. government nears shutdown                          
  > London copper flat on China holidays, U.S. deadlock                  
  > Brent slips below $108 as U.S. govt begins shutdown                    
    The plumbing supplies group said on Tuesday it would return 300 million
pounds ($486 million) to shareholders after it posted a 10.7 percent rise in
full-year trading profit. It also said revenue growth rates in the new financial
year have been similar to the fourth quarter of the previous year.
    The consumer goods company warned after market close on Monday that a
slowdown in its emerging markets accelerated in the third quarter and it now
expects underlying sales growth of just 3 to 3.5 percent in the period.
    In the frantic days after the 2010 Gulf of Mexico oil spill, BP  lied about
how much oil was leaking from its Macondo well and took too long to cap it,
plaintiffs' lawyers said on Monday at the opening of the second phase of the
company's trial. 
    Britain's Tesco put its U.S. grocery store chain into bankruptcy on Monday
as part of a plan to sell most of the 167 stores to a private equity firm led by
billionaire Ron Burkle. 
    Norwegian telecoms group Telenor finished its share buyback programme and
will cancel 15.17 million shares or about 1 percent of all outstanding shares,
it said on Tuesday.  
    For more on the company, click 
    French media group Vivendi said on Tuesday that its Brazilian GVT subsidiary
had started negotiations with satellite group EchoStar Technologies LLC 
to set up a joint-venture for pay-TV services in Brazil. 
     French advertising group Publicis said it had finalised a deal to increase
its equity stake to 51 percent in its long-term Romanian partner agencies Leo
Burnett & Target, Starcom MediaVest Group, Optimedia, The Practice and iLeo.
    The conglomerate is a possible bidder to buy Greek rolling stock operating
company ROSCO, a source close to the talks said on Monday, making it the first
major German company to take an interest in the country's asset sales programme.
    Related news 
    French geophysical services said on Tuesday it had won a contract for a
large seismic exploration program offshore West Africa. Financial details were
not disclosed. 
    Power group EDF has started exclusive talks with energy services group
Dalkia France to buy Citelum, a company specialising in urban lighting
equipment, Le Figaro said on Tuesday. 
    U.S. health regulators expanded the approval of Roche Holding AG's breast
cancer drug Perjeta and will now allow its use to help shrink tumors prior to
surgery, the Food and Drug Administration said on Monday.
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