Europe Factors to Watch-Shares set to dip early

Mon Nov 12, 2012 7:44am GMT

PARIS, Nov 12 (Reuters) - European stocks are set to dip on Monday morning,
adding to last week's sharp losses, as worries over the looming U.S. fiscal
cliff and brewing concerns about Greece eclipse better-than-expected macro data
from China.
    At 0727 GMT, futures for the Euro STOXX 50, Germany's DAX 
and France's CAC were down 0.2 percent.
    Data showed over the weekend that China's export growth climbed to a
five-month high above 11 percent, beating expectations and adding to recent data
suggesting the country's seven straight quarters of slowing economic growth have
ended. 
    The reassuring data, however, was offset by figures showing Japan's economy
shrinking 0.9 percent in the third quarter. Though this was in line with
expectations, the decline in capital expenditure was much steeper than forecast.
 
    On Sunday, the Greek parliament approved an austerity budget for next year,
a necessary step to unblock a new tranche of credit from the European Union and
International Monetary Fund before the government runs out of cash, although
investors remain concerned about whether the EU and IMF will agree to send the
next tranche.
    "With its cash reserves almost depleted and a 5 billion-euro t-bill rollover
later this week, the hope is that (the parliament approval) will be enough for
EU finance ministers, meeting in Brussels today, to sanction the release of the
next tranche of aid," CMC markets analyst Michael Hewson wrote in a note.
    "Unfortunately, things are never that simple, with arguments raging amongst
EU ministers about how best to get Greece's runaway debt levels under some
semblance of control, without the need to find any more money. A difficult
prospect when a two-year extension is likely to require another 30 billion
euros."
    Investors also remain concerned 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 automatically kick in in early 2013 if a deal between Democrats and
Republicans in Congress is not reached before the end of the year.
    Investors fear a deadlock in negotiations would trigger about $600 billion
in spending cuts and tax hikes, which could derail the U.S. economic recovery.
    The euro zone's blue-chip Euro STOXX 50 index ended Friday
almost unchanged after tumbling 1.5 percent during the session and testing a key
support level at 2,440.58, which represents a low hit in mid-October, before
bouncing back in late trade.
    "The index could rebound in the short term, towards the top line of the
triangle pattern on the chart, so it's possible that we see a bounce early this
week but it doesn't mean that this will be the start of a rally. We're neutral
at this point," Aurel BGC chartist Gerard Sagnier said.
    
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 MARKET SNAPSHOT AT 0730 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,379.85   0.17 %     2.34
 NIKKEI                              8,676.44  -0.93 %   -81.16
 MSCI ASIA EX-JP                       516.53  -0.09 %    -0.45
 EUR/USD                               1.2712   0.03 %   0.0004
 USD/JPY                                79.43  -0.05 %  -0.0400
 10-YR US TSY YLD                       1.613       --     0.00
 10-YR BUND YLD                         1.348       --     0.00
 SPOT GOLD                          $1,733.90   0.17 %    $2.99
 US CRUDE                              $85.93  -0.16 %    -0.14
 
  > Asian shares held back by weak Japan GDP, US fiscal cliff 
  > Wall St ends higher, but investors still weary 
  > Nikkei slumps to 4-week closing low on U.S. fiscal worries 
  > Euro steady ahead of EU finance ministers' meeting 
  > Gold edges up, holds near 3-week high on US fiscal woes 
  > Copper rebounds from 2-mth lows; China worries cap gains 
  > Brent dips below $109, U.S. fiscal woes weigh 
    
    COMPANY NEWS:
    
    SAS 
    The loss-making Scandinavian airline outlined a survival plan that will see
it cut pay, sell assets and get new loans from banks. 
    
    PUBLICIS  
    The French advertising group said that demand for advertising rebounded in
October, as it reported more than 7 percent organic growth in group sales on
strength in the United States, emerging markets and digital ads. 
    
    TELECOM ITALIA 
    Egyptian billionaire Naguib Sawiris is mulling an investment of up to 4-5
billion euros in Telecom Italia, Il Corriere della Sera reported on Saturday
without citing its sources. 
    
    BANCO POPULAR 
    Spain's Banco Popular had to discount its 2.5 billion euro rights
issue much more than expected in order to attract investor interest and avert
the need for European aid. 
    Separately, Cinco Dias said all of Popular's main shareholders subscribed to
the rights issue to maintain their stakes except for German shareholder Allianz,
whose holding was diluted to 4.2 percent from 5.9 percent previously.
    
    DEUTSCHE TELEKOM 
    Blackstone Group has cut its stake in Deutsche Telekom by about a
third in a move likely to have notched up a loss for the U.S. private equity
group. 
    
    INTESA SANPAOLO 
    Italy's biggest retail bank Intesa Sanpaolo is well equipped to
stave off a surge in bad loans, which it sees peaking before the middle of next
year, the bank's executive vice chairman told Reuters on Sunday. 
    
    MEDIASET 
    Italy's private broadcaster Mediaset, owned by former prime minister Silvio
Berlusconi, will post its first ever net loss when it releases third quarter
results next week, a company source told Reuters on Friday. 
    
    E.ON  
    Germany's leading utility and its employees have agreed on the outlines of a
cost cutting programme, chief human resources officer Regine Stachelhaus told
daily Handelsblatt.
    
    TOTAL  
    The chief executive of the French oil major said he would not deny a report
that the firm was in talks to sell assets in Nigeria, worth about $2.4 billion,
to China's Sinopec. 
    
    CREDIT SUISSE 
    Credit Suisse won't follow Swiss rival UBS in winding down its
fixed income business as it has a stronger position in the business, its
chairman was quoted as saying. 
    
    JULIUS BAER 
    Swiss wealth manager Julius Baer said it will buy 19.9 percent of Italy's
Kairos Investment management as part of a deal between the two groups to create
a leading onshore wealth management group in Italy. 
    
    NOVARTIS 
    Novartis said new two-year data with Certican showed positive outcomes at 24
months in the largest liver transplant trial to date. 
    
    ROCHE 
    Roche's drug RoActemra helped improve the symptoms of rheumatoid arthritis
better than Abbot's Humira when used as single treatment, according to a study
presented at the American College of Rheumatology meeting, supporting previous
data.
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