June 27, 2012 / 5:41 AM / in 5 years

Europe Factors to Watch-Shares set to bounce off 1-week lows

PARIS, June 27 (Reuters) - European stock index futures pointed to a higher
open on Wednesday, although gains and volumes could be capped ahead of this
week's EU summit, with investors sceptical it will deliver any strong new
measures to support the euro zone's debt-stricken countries.
    Late on Tuesday, Italian Prime Minister Mario Monti promised to press for
joint action by European Union countries to help ease pressure on Italian bonds,
and repeated his call for the European Financial Stability Facility and the
European Stability Mechanism to be used. 
    German Chancellor Angela Merkel rejected the idea of mutualising debt -
favoured by France, Italy and Spain -, saying Europe would not share total debt
liability "as long as I live", although Germany appeared ready to budge on
giving the euro zone's rescue funds more flexibility. 
    At 0627 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were up 0.5-0.7 percent.
    European stocks ended nearly unchanged on Tuesday following a sharp
three-session sell-off, with trading volumes quickly drying up ahead of the
    "The clear drop in volumes, which means real buyers have moved on the
sidelines, is a sign that things remain fragile and the risk of seeing indexes
revisiting the 2012 lows is still high," Aurel BGC chartist Gerard Sagnier said.
    But despite Tuesday's lacklustre session, signs that investors were
positioning themselves for a rebound in stocks in the coming weeks have emerged
in the derivatives market.
    The put/call ratio of Euro STOXX 50 options, a ratio of the
trading volume of put options versus call options used to gauge investor
sentiment, has fallen to 0.75, a level not seen in nearly two months, signalling
that an increasing number of investors are positioning themselves to benefit
from a potential rally in underlying equities.
    The Euro STOXX 50 volatility index - Europe's main gauge of anxiety
known as the VSTOXX - has also sharply fallen this month, down 27 percent since
a peak on June 4, breaking the usually strong negative correlation with stocks. 
    The last time there was such a drop in the correlation between the
volatility index and underlying equities was in mid-December, at the start of a
20 percent rally in euro zone stocks that lasted three months.
    Mining shares will be in the spotlight on Tuesday after Qatar, Xstrata's
 second largest shareholder, threw a huge roadblock in the way of
Glencore's $30 billion takeover of the miner with a surprise demand on
Tuesday for better terms. 
 MARKET SNAPSHOT AT 0634 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,319.99   0.48 %     6.27
 NIKKEI                              8,730.49   0.77 %     66.5
 MSCI ASIA EX-JP                       469.33   0.85 %     3.95
 EUR/USD                               1.2489  -0.01 %  -0.0001
 USD/JPY                                79.57   0.08 %   0.0600
 10-YR US TSY YLD                       1.630       --     0.00
 10-YR BUND YLD                         1.522       --     0.01
 SPOT GOLD                          $1,568.64   -0.2 %   -$3.14
 US CRUDE                              $79.13  -0.29 %    -0.23
    GLOBAL MARKETS-Shares up, euro pressured as EU summit eyed 
    US STOCKS-Wall St bounces back but Europe woes linger      
    Nikkei flat as sluggish blue-chips offset speculatives     
    METALS-Copper down ahead of EU summit; China demand eyed   
    Brent slips below $93, EU doubts counter N.Sea supply cut  
    FOREX-Euro inches up, but hopes dashed for EU summit       
    Gold ticks up in thin trade; deflation worry lingers       
    Qatar, Xstrata's second largest shareholder, threw a huge roadblock
in the way of Glencore's $30 billion takeover of the miner with a
surprise demand on Tuesday for better terms. 
    The steelmaker said profits will fall sharply this year and forecast its
steel division would slip into a loss as customers hold back on orders in light
of economic turbulence. 
    The bank said it would wind down its ship financing and commercial real
estate units as it seeks to cut back on risky, capital-intensive activities.
    The car maker plans to sell more than 50 percent of its vehicles outside
Europe by next year, up from 48 percent, Chief Operating Officer Carlos Tavares
said during a press conference in Seoul. 
    The French bank has lost two of its top Geneva-based bankers in commodity
trade finance, it confirmed, dealing a further blow to one of the sector's major
    Roche Holding AG said it was overhauling its research operations by
closing the 80-year-old New Jersey facility where Valium was discovered, cutting
1,000 jobs and replacing its drug research chief.
    Investors claiming that Porsche SE misled them about plans to take over
Volkswagen in 2008, will take to German courtrooms on Wednesday, pushing for
more than 4 billion euros in damages. 
    The period for Rhoen-Klinikum shareholders to accept a 22.50 euros a share
offer from Fresenius for the hospital operator ends at midnight. 
    Gazprom, Russia's gas export monopoly, is expected to give up some or all of
its rights to market the gas from the giant Shtokman gas field under a new
shareholder agreement likely to be signed by the end of the year, a source
involved in the negotiations said. 
    Five pharmaceutical giants including Novartis AG and Sanofi SA
 remain in the running for Amylin Pharmaceuticals Inc, as the
auction of the diabetes drugmaker with a market value of $4.5 billion enters the
last leg, according to people familiar with the matter.
    French state owned bank Caisse des Depots et Consignations, a 50 percent
owner in Veolia Transdev, has rejected a turnaround plan for the transport firm
saying it lacks ambition, French newspaper Les Echos reported.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below