February 21, 2014 / 6:35 AM / 6 years ago

Europe Factors to Watch-Shares set to track Wall St rally

PARIS, Feb 21 (Reuters) - European stocks were set to rise on Friday,
tracking a rally on Wall Street where robust U.S. factory activity data eclipsed
recent soft macro figures, although gains could be limited by mixed corporate
    At 0726 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were 0.2-0.5 percent.
    Wall Street's S&P 500 gained 0.6 percent on Thursday, lifted by
Markit's preliminary U.S. Manufacturing Purchasing Managers Index, which shows
factory activity accelerated at its fastest pace in nearly four years in
February, a bullish economic indicator following a string of
weaker-than-expected reports. 
    "Despite hesitation and mixed closes in Europe yesterday, a bullish close in
the U.S. fed through into sentiment in Asia and we are expecting a positive
handover on the open," Capital Spreads trader Jonathan Sudaria wrote in a note.
    On the earnings front in Europe, Europe's No. 2 insurer AXA posted
a lower-than-expected quarterly profit, while Kering, owner of Yves
Saint Laurent, Bottega Veneta and Gucci brands, posted a sharply lower full-year
    Despite the soft results from the two French blue-chips, data shows the
earnings season in Europe has been relatively positive so far.
    About 60 percent of STOXX 600 companies have reported results so
far in the earnings season, of which 59 percent have met or beaten profit
forecasts, with net profits rising 1.2 percent year-over-year on average,
Thomson Reuters Starmine data shows.
    Overall, investors remained positive on European stocks, with data showing
further brisk inflows into the region.
    A poll by Thomson Reuters Lipper of 102 U.S.-based funds invested in
European equities, which include exchange-traded funds' (ETFs) holdings, shows
the funds added $502 million into European equities in the seven-day period to
Feb. 19, a 34th straight week of net inflows - marking the longest streak of
weekly inflows since Lipper started to monitor flows in 1992.
    So far this year, U.S.-based funds have added about $4.6 billion into
European equities.
    Europe bourses in 2014:Asset performance in 2014:------------------------------------------------------------------------------
                                        LAST         PCT CHG    NET CHG
 S&P 500                                1,839.78     0.6 %      11.03
 NIKKEI                                 14,865.67    2.88 %     416.49
 MSCI ASIA EX-JP                        459.54       0.71 %     3.23
 EUR/USD                                1.3712       -0.04 %    -0.0006
 USD/JPY                                102.51       0.24 %     0.2500
 10-YR US TSY YLD                       2.759        --         0.01
 10-YR BUND YLD                         1.690        --         0.00
 SPOT GOLD                              $1,319.10    -0.26 %    -$3.41
 US CRUDE                               $102.62      -0.13 %    -0.13
  > GLOBAL MARKETS-Shares up U.S. optimism but EM concerns remain 
  > US STOCKS-Wall St rises on factory data; Tesla and Facebook jump 
  > Tokyo's Nikkei share average closes up 2.88 pct 
  > FOREX-Dollar steady, finds footing after upbeat U.S. data 
  > PRECIOUS-Gold set to finish near flat for the week 
  > METALS-LME copper struggles on China growth concerns 
  > Brent steadies above $110 on Africa supply cuts 
    Italian luxury brand Gucci continued to see its sales growth slow in the
fourth quarter as parent Kering, also owner of Yves Saint Laurent and Bottega
Veneta, posted sharply lower full-year profits, hit by restructuring charges.
    Europe's No. 2 insurer said its 2013 net income rose 14 percent at constant
exchange rates, helped by stronger growth in its life, and property and casualty
businesses, as well as a recovery in asset management. 
    Argentina and Repsol will sign a definitive $5 billion settlement over the
seizure of YPF YPFD.BA within days, a source involved in the talks said on
Thursday, ending a bitter two-year bilateral dispute. 
    Spanish-led consortium has resumed expansion work on the Panama Canal, a
source close to negotiations. 
    Spanish bank BBVA said on Thursday it had bought U.S.-based
digital banking firm Simple in a deal that values the company at $117 million.
    The diversified drugs and chemicals group is ready to pursue a takeover
worth billions to boost its medicines unit even after making an offer for AZ
Electronic Materials, its Chief Executive Karl-Ludwig Kley was quoted
as saying by daily Handelsblatt. 
    Allianz's German operations have underperformed competitors over the last
five years, credit rating agency Moody's said, arguing that the insurer's
pricing power has been limited by fierce competition and price wars. 
    The carbon specialist said it expected a net loss of almost 400 million
euros ($548.50 million) for 2013 and would not pay a dividend for the year,
citing weakness at its main graphite electrodes business. 
    The group said on Thursday it was planning a capital increase of about 800
million euros. 
    The French mining and metals group posted a full-year loss on Friday after
being hit by low nickel prices but said it was confident in the outlook for the
nickel market. 
    The holiday company posted a 4.3 percent rise in first-quarter revenue at
constant exchange rates to 344 million euros. Winter bookings are up 3.1 percent
at constant exchange rates as growth in Asia and the Americas offsets a
significant decline in Europe and Africa. 
    The French auto supplier said profit rose 40 percent in the second half of
2013 as a European car sales upturn and increased spending on fuel-saving
technologies lifted revenue. 
    The French cosmetics maker still has the firepower to pursue acquisitions
even after spending 6.5 billion euros to buy back 8 percent of its shares from
Nestle, a senior executive said.
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