Europe Factors to Watch-Shares set to reverse Tuesday's gains

Wed Nov 14, 2012 7:45am GMT

PARIS, Nov 14 (Reuters) - European stocks are set to fall on Wednesday,
surrendering the previous day's late rally and tracking losses on Wall Street as
the market remains range-bound, with investors reluctant to make bets ahead of
the U.S. 'fiscal cliff'.
    At 0730 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were down 0.3 percent.
    Investors are concerned about 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.
    Both Democrats and Republicans stood their ground on Tuesday, and 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.
 
    "A recession would not serve anyone, so the fiscal cliff won't happen. But
the negotiations will be tough and could trigger a downgrade of the U.S. credit
rating," Efigest Asset Management portfolio manager Regis Yancovici said.
    "But as John Templeton said, 'bull markets are born on pessimism'. It's time
to buy European stocks, not to sell them, with a horizon of at least two years.
It's time to buy the dips."
    Southern European countries will be in focus on Wednesday, as Spanish and
Portuguese workers will stage the first coordinated general strike across the
Iberian Peninsula, while unions in Greece and Italy also plan work stoppages and
demonstrations on a "European Day of Action and Solidarity" against austerity
policies. 
    Euro zone banks will be in the spotlight after Italy's two biggest lenders,
Intesa Sanpaolo and UniCredit, posted forecast-beating
results and said they have boosted their capital bases even as they both set
aside billions of euros against risky loans. 
    The euro zone's blue chip Euro STOXX 50 index rose 0.8 percent
on Tuesday, bouncing from a strong support zone around 2,450 points. The index
has been stuck between 2,440 and 2,600 since mid-September.
     
--------------------------------------------------------------------------------
 MARKET SNAPSHOT AT 0727 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,374.53   -0.4 %     -5.5
 NIKKEI                              8,664.73   0.04 %     3.68
 MSCI ASIA EX-JP                       514.52   0.46 %     2.35
 EUR/USD                                1.271   0.06 %   0.0008
 USD/JPY                                79.83   0.58 %   0.4600
 10-YR US TSY YLD                       1.615       --     0.02
 10-YR BUND YLD                         1.348       --     0.01
 SPOT GOLD                          $1,726.66    0.1 %    $1.77
 US CRUDE                              $85.40   0.02 %     0.02
 
  > GLOBAL MARKETS-Stocks steady but US fiscal, Greek fears linger 
  > US STOCKS-Microsoft leads Wall St lower, but retailers gain 
  > Tokyo's Nikkei share average closes up 0.04 pct 
  > Bonds firm on fiscal cliff, Greece anxiety 
  > Euro hovers near 2-mth low; Greece, economy woes in spotlight 
  > Gold inches up on steadier euro; platinum hits 3-wk high 
  > Copper steadies on China prospects; U.S. fiscal worries weigh 
  > Brent slips below $108 as IEA cuts demand outlook, supply rises 
    
    COMPANY NEWS:
    
    INTESA, UNICREDIT 
    Italy's two biggest banks, Intesa Sanpaolo and UniCredit,
delivered higher-than-expected profits and strengthened their capital bases even
as they both set aside billions of euros against risky loans. 
        
    BANCA MONTE DEI PASCHI DI SIENA 
    Italy's third biggest lender posted an unexpected net loss in the third
quarter of the year as writedowns on bad loans more than offset trading gains.
 
    
    VIVENDI 
    The entertainment-to-telecoms conglomerate raised its annual profit target
by 8 percent to 2.7 billion euros ($3.43 billion) on strong video game sales,
though weakness persisted at its key French telecom unit. 
        
    ENEL 
    Italy's biggest utility Enel confirmed its full-year guidance on Tuesday
after its core earnings in the first nine months fell 3.9 percent due to a weak
domestic power business and the absence of one-off items. 
    
    BHP BILLITON 
    The miner expects to expand its iron ore capacity by nearly a fifth just by
working its mines, rail lines and port harder as it looks to control costs in a
softer iron ore market, the global miner's iron ore chief said on Wednesday.
 
    
    EDF 
    The French state-controlled utility said it expects core earnings growth to
drop next year because of "deteriorating business conditions", before recovering
in 2014. 
    
    MEDIASET 
    Italy's biggest broadcaster boosted its cost-cutting plan and posted its
first-ever quarterly loss on Tuesday as a recession and pay-TV competition
intensified. 
    
    TELECOM ITALIA, VIVENDI 
    The phone operator is looking at Vivendi's Brazilian telecoms company GVT,
along with other opportunities, it said on Tuesday, one day after a foreign
investor proposed injecting fresh cash into Italy's largest telecoms operator.
 

    AMADEUS, AIR FRANCE-KLM, LUFTHANSA 
    German airline Lufthansa and Air France-KLM will sell 5.28 percent of travel
technology company Amadeus, sole bookrunner HSBC said after market close on
Tuesday. 
    
    ICAP 
    The firm said its revenue fell 14 percent for the first half of the year,
hit by a drop in trading activity as investment banks cut back in the financial
crisis. 
    
    AXA 
    Most of the fees U.S. money manager AllianceBernstein L.P. lost from
a sharp reduction in large-cap stock assets since the financial crisis have been
replaced, top executives at the company said. 
    
    TOD'S, FERRAGAMO 
    Leather shoemaker Tod's reported on Tuesday a 14 percent sales decline in
its core Italian market in the nine months to the end of September, missing
analysts' forecasts. Salvatore Ferragamo fared better than Tod's in Europe,
where third-quarter sales grew 15.7 percent. Nine-month net profits rose 8.1
percent to 84.7 million euros. 
    
    ACCIONA 
    Construction and renewables group Acciona posted a 64 percent fall in
nine-month net profit on Tuesday. 
    
    EADS 
    Airbus has begun studying the feasibility of increasing production later
this decade to keep up with anticipated demand, even as it keeps a check on
short-term output plans due to worries over its suppliers, a senior company
executive said. 
    
    TECNICAS REUNIDAS 
    Oil engineering firm Tecnicas Reunidas reported a 1.8 percent increase in
nine-month net profit on Tuesday after market close. 
    
    ENBW  
    The utility is planning to halt its 1.5 billion euro investment in a North
Sea wind farm due to lack of sufficient grid connections, Stuttgarter Zeitung
reported without citing sources. 
    
    AIR BERLIN 
    Germany's No.2 airline, which is due to publish its financial results on
Thursday, is planning to cut about 10 percent of its 9,300 jobs, German TV
station n-tv reported.