Europe Factors to Watch-Shares set to inch up after China data

Fri Nov 9, 2012 7:48am GMT

By Blaise Robinson
    PARIS, Nov 9 (Reuters) - European stocks were seen inching higher on Friday,
halting a two-session slide, as better-than-expected economic data from China
reassured investors on the outlook for the world's second biggest economy.
    Gains could be limited, however, by concerns over austerity hit Greece and
its funding needs as well as concerns over the handling of U.S. fiscal policy in
the near term, the so-called 'fiscal cliff' of spending cuts and tax increases
due to kick in in early 2013,  which weighed on Asian equities overnight.
    At 0734 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were up 0.04-0.22 percent.
    Data on Friday showed China's annual industrial output growth rose more than
expected last month, offering further evidence that a cyclical recovery gained
strength. 
    "The earnings season has been mixed, the newsflow on Europe's crisis is not
great, but if we can get some reassuring figures out of China, it could at least
help the market avoid a correction," a Paris-based trader said.
    "Sentiment towards equities is improving, especially from yield hunters, but
with trouble in Greece and the U.S. fiscal cliff looming, investors are in no
rush to start buying."
    European equities ended slightly down on Thursday following a roller-coaster
session marked by brisk volume, with rekindled worries about Greece keeping
investors on edge. 
    Trading volumes - which have been anaemic over the past two weeks, before
spiking in late trade on Wednesday - were strong again on Thursday, with volumes
on the DAX and the CAC about 30-35 percent higher than the average daily volume
of the past three months.
    Investors have been fretting about the risk of a deadlock in negotiations
over the U.S. fiscal cliff. If a deal in the Congress between Republicans and
Democrats is not reached before the end of the year, about $600 billion in
spending cuts and tax hikes are set to be automatically triggered, which
investors fear will derail the U.S. recovery.
    The euro zone's blue chip Euro STOXX 50 index is on track to
record a loss of 2.67 percent on the week, the index's worst weekly performance
in seven weeks.
     However, the chart for the blue-chip index shows a bullish symmetric
triangle pattern shaping up since mid-September, with the index trading in a
tightening range, and a break above the triangle could quickly send the index
rallying to March levels. 
   The index tested the lower band of the triangle in late trading on Thursday,
before bouncing back.
    If it falls, however, the index will find support at 2,470 points,
representing the lower band of the triangle, while on the upside, the index's
next resistance level is at 2,525, its 50-day moving average.
    The banking sector will be in focus on Friday after France's Credit Agricole
 posted a steeper-than-expected 2.85 billion euro loss as the lender
was slammed by its exit from Greece and a series of other write-downs.
 
--------------------------------------------------------------------------------
 MARKET SNAPSHOT AT 0735 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,377.51  -1.22 %   -17.02
 NIKKEI                              8,757.60   -0.9 %   -79.55
 MSCI ASIA EX-JP                       517.13  -0.33 %    -1.72
 EUR/USD                               1.2759   0.11 %   0.0014
 USD/JPY                                79.48   0.04 %   0.0300
 10-YR US TSY YLD                       1.634       --     0.02
 10-YR BUND YLD                         1.358       --    -0.01
 SPOT GOLD                          $1,731.80    0.1 %    $1.81
 US CRUDE                              $85.12   0.04 %     0.03
 
  > GLOBAL MARKETS-Asian shares dip on US fiscal fears, Europe woes 
  > Wall St drops for second day on U.S. fiscal worries 
  > Nikkei drops to 4-week closing low on U.S. fiscal worries 
  > TREASURIES-U.S. 10-year notes dip, take breather after rally 
  > Euro near 2-month low on deepening economic gloom 
  > Gold hits 3-week high on US fiscal concern 
  > LME copper edges up, but U.S. fiscal worries drag 
  > Brent holds above $107; U.S., Europe fiscal woes in focus 
    
    COMPANY NEWS:
    
    CREDIT AGRICOLE 
    The French lender reported a steeper-than-expected 2.85 billion-euro ($3.63
billion) quarterly loss on Friday as the French bank was slammed by its exit
from Greece and a series of other write-downs. 
    
    TELECOM ITALIA 
    Italy's biggest telecoms operator stuck to its targets on Friday after
posting a 3 percent drop in core profits, as Italian consumers and businesses
cut spending in the recession. 
       
    ROLLS-ROYCE 
    The firm expects to deliver good growth in full-year profit, despite
lowering revenue guidance for its marine division, which has been hit by changes
to the timing of some deliveries. 

    ALLIANZ 
    The firm confirmed its 2012 target for operating profit to exceed 9 billion
euros ($11.5 billion), based on initial estimates of claims from superstorm
Sandy in the United States. 
    
    GENERALI 
    The insurer's third-quarter operating results rose by 43 percent in the
third quarter boosted by growth in the life segment, putting Italy's biggest
insurer on course to hit its target for this year. 

    RICHEMONT 
    The luxury goods company posted a six-month profit of 1.081 billion euros
($1.38 billion) on a 12 percent rise in sales when stripping out exchange rate
swings. The company also said Cartier chief Bernard Fornas and deputy chief
executive officer Richard Lepeu will be joint CEOs from April 1. 

    FINMECCANICA  
    The Italian aerospace and defence company said it returned to a profit in
the first nine months of 2012 helped by growth at its helicopters and
aeronautics segments, rebounding from a loss triggered by provisions on its
Boeing 787 contract. The company said it aimed to obtain binding offers on
planned asset disposals by the end of the year.
    
    LONMIN 
    Platinum miner has priced a $817 million rights issue at a discount of 45
percent, pushing ahead with a cash call to slash its debt and fund a recovery,
after it was battered by six weeks of strikes. 
    
    EADS 
    Boeing Co reported it has bagged more than 1,000 net new orders so far this
year, putting the U.S. planemaker on course to sell more aircraft than European
rival Airbus for the first time since 2006. 
    
    LAFARGE 
    The cement maker confirmed its debt reduction and market growth targets for
2012 on Friday despite posting a 5 percent decline in third-quarter net profit.
 

    GEOX  
    The Italian shoemaker Geox said it is expecting sales to decline by around
eight percent through to the first half of 2013 as a prolonged recession hurt
shopping in its core domestic market. It said sales fell nine percent to 701.5
million euros ($892.80 million) in the first nine months of the year. The group
expects sales to fall at a slightly lower pace for the whole of 2012.
 

    DEUTSCHE BANK 
    Germany's largest bank, which regulators have put on a list of the world's
four banks that potentially pose the greatest systemic risk, will never need to
be bailed out, its co-Chief Executive Juergen Fitschen said at a conference in
Hamburg late on Thursday. 
    
    SANOFI, TOTAL 
    The drugmaker became France's biggest listed company on Thursday, surpassing
oil giant Total as the top stock by market value on the CAC 40
, a position Total had commanded for 12 years. 
    
    DANONE 
    Japanese lactic drink maker Yakult Honsha is still in talks with
Danone over a possible sale of additional Yakult shares to Danone. "The
negotiations on the alliance agreement are still ongoing "a Yakult spokesman
said. Danone could not be immediately reached for comment. 
    
    MAUREL ET PROM 
    Maurel Et Prom said nine-month sales rose 22 percent to 322 million euros.
The increase was mainly due to the incorporation in 2012 of oil sales from the
Sabanero field in Colombia along with a favourable U.S dollar/euro exchange
rate. 
    
    NOVO NORDISK 
    An advisory panel to the U.S. Food and Drug Administration late on Thursday
voted to recommend approval of the Danish drugmaker's new ultra-long-acting
insulin degludec, despite signals of possible cardiovascular risk.