Europe Factors to Watch-Shares set to dip early
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. -------------------------------------------------------------------------------- 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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