Europe Factors to Watch-Shares set to rally on U.S. fiscal deal

Wed Jan 2, 2013 7:38am GMT

PARIS, Jan 2 (Reuters) - European stocks were set to rally on Wednesday in
their first session of the new year after U.S. lawmakers approved a deal
preventing massive tax hikes and spending cuts that threatened to drag the
economy into recession.
    At 0720 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were up 1.8-2.5 percent.
    The Republican-controlled House of Representatives approved a bill that will
raise taxes on top U.S. earners, fulfilling President Barack Obama's re-election
promise and avoiding the "fiscal cliff" of $600 billion in broad-based tax hikes
and spending cuts. 
    Asian shares surged and the dollar dropped following Washington's
last-minute deal, with The MSCI Asia Pacific ex-Japan index of stocks
 up 2 percent. Japanese markets were closed on Wednesday for a
holiday.
    The Bund future was last down 85 ticks at 144.79, compared with
145.64 of Monday's close.
    "The market knew that the negotiations would drag on to the very last
minute, but this was too big for both parties to walk away, just look at what
big austerity measures have done to Europe," a Paris-based trader said.
    "With the fiscal cliff out of the way, the focus will now turn back to the
macro data. We're positive for stocks in the medium term, but we need reassuring
data."
    
    
    
    The FTSEurofirst 300 rose 13.2 percent in 2012 while the euro
zone's blue chip Euro STOXX 50 climbed 13.8 percent - both indexes
posting their best annual performance since the sharp bounce of 2009 - propelled
by bold measures from central banks to resolve Europe's debt crisis and revive
global growth.
    The market's sharp rally that started in early June brought valuation ratios
to levels not seen since April 2010. The broad STOXX Europe 600 trades
at 11.5 times 12-month forward earnings, up from a low of 8.3 hit during the
heat of the region's debt crisis in October 2011, but still below the 10-year
average of 12.2. 
    After suffering an 84 percent plunge between October 2009 and June this
year, Athens's benchmark index posted a gain of 33.4 percent for 2012,
the best performance among European benchmarks and outpacing Germany's DAX
, up 29.1 percent.
   The Spanish and UK equity markets were the laggards in 2012, with Madrid's
IBEX down 4.7 percent on the year and London's FTSE 100 up only
5.8 percent, outpaced by France's CAC 40 index, which gained 15.2
percent and Italy's FTSE MIB, up 7.8 percent. 
    Gains in Europe on Wednesday, however, could be limited by concerns over the
economic outlook for the region after German Chancellor Angela Merkel said in
her New Year's address that the euro zone sovereign debt crisis was far from
over. 
    Investors awaited manufacturing PMI data Spain, Italy, France and Germany,
due on Wednesday, looking for insight on the extent of the economic slowdown.
    Swiss markets were closed on Wednesday for a holiday.
--------------------------------------------------------------------------------
 MARKET SNAPSHOT AT 0726 GMT                            
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,426.19   1.69 %    23.76
 MSCI ASIA EX-JP                       559.19   2.02 %    11.08
 EUR/USD                               1.3287   0.63 %   0.0083
 USD/JPY                                87.21   0.62 %   0.5400
 10-YR US TSY YLD                       1.757       --     0.00
 10-YR BUND YLD                         1.379       --     0.06
 SPOT GOLD                          $1,682.10   0.45 %    $7.56
 US CRUDE                              $92.82   1.09 %     1.00
 
  > GLOBAL MARKETS-Asia stocks rally as US fiscal crisis ends 
  > FOREX-Yen down as U.S. avoids 'fiscal cliff' 
  > Gold regains strength on U.S. fiscal talks progress 
  > METALS-Copper hits two-week high on imminent US fiscal deal 
  > Brent rises toward $112 as US approves fiscal deal 
    
    COMPANY NEWS:
    
    SIEMENS  
   The engineering group's CEO told Frankfurter Allgemeine Sonntagszeitung that
he expects 2013 to be tough for the industry but that there could be some
positive developments. Related news 
    
    AIR FRANCE-KLM 
   The airline denied a report in Le Figaro that it planned to close three
regional French bases - at Marseille, Nice and Toulouse - adding that it would
assess its strategy in September. 
    
    DEUTSCHE BANK 
    Consolidation of European banks is not yet at an end and Germany's financial
sector will have to change, Deutsche Bank's co-CEO Juergen Fitschen said in an
interview with Boersen-Zeitung on Saturday. 

    ARCELORMITTAL 
   The world's biggest steelmaker will sell a $1.1 billion stake in a Canadian
iron ore mine operator to a consortium that includes South Korean steelmaker
POSCO and Taiwan-listed China Steel Corp, China Steel said in a
statement. 
    
    DAIMLER 
    Daimler CEO Zetsche hopes to return the automaker to the top spot in the
premium car market ahead of Audi and BMW by 2020, he said
in an interview with Boersen-Zeitung on Saturday. 
    
    BAYER 
    The drugmaker's clot prevention drug Xarelto will face more competition
after U.S. health regulators approved Eliquis, developed by Bristol Myers-Squibb
 and Pfizer, for treatment in patients with atrial fibrillation,
or irregular heartbeats. 
    
    METRO 
    The CEO of the group's department store chain Kaufhof told newspaper Welt am
Sonntag that Christmas trading had been satisfactory, although bargain-hunting
shoppers had waited until late to spend on presents, reflecting a trend across
Europe. 

    IMPREGILO 
    The operative targets in Impregilo's 2013-15 industrial plan are "ambitious
but can be met", Chief Executive Pietro Salini told MF-Milano Finanza newspaper
on Saturday.
    
    ATLANTIA 
    Italian motorway tariffs are set to rise an average 2.9 percent on Jan. 1,
2013, Italy's Infrastructure and Transport Ministry said on Sunday. Tariffs on
roads operated by Atlantia will rise by 3.47 percent, the ministry said.
 
    
    TELECOM ITALIA 
    Broadband company Infostrada, a unit of Vimpelcom's Wind, would
consider joining a new company to manage Telecom Italia's fixed-line network
after any eventual spin-off, Wind CEO Maximo Ibarra told Il Corriere della Sera
on Sunday. Ibarra said Infostrada risks closure if Italy's Antitrust authority
does not help it compete with Telecom in the fixed-line market.
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