European Factors to Watch-Chinese data seen nudging market to fresh highs

Thu Jan 10, 2013 7:38am GMT

LONDON, Jan 10 (Reuters) - European stocks are seen opening firmly on
Thursday, with key indexes poised to test fresh multi-month highs after
stronger-than-expected Chinese trade data offered fresh proof of a tentative
global economic recovery.
    At 0729 GMT, futures for Euro STOXX 50, Germany's DAX and
Britain's FTSE 100 were each up 0.1 percent, while those for France's
CAC were flat.
    The gains in the national indexes should nudge the pan-European FTSEurofirst
300 to fresh 2-year highs, building on gains of 0.7 percent the
previous session and heading for its best week in a month and a half.
    Iron ore imports in China, the world's top buyer, hit a record high in
December. The positive news for the international mining sector
will likely be balanced against an intensifying cyclone bearing down on
Australia's west coast mining region. 
    Exports out of China grew 3-1/2 times faster than expected last month,
flagging a cautious economic improvement globally, although the figures remained
weak historically. 
    "The headline is obviously good," said Ioan Smith, strategist at Knight
Capital.
    "There is evidence to suggest that South East Asia is stabilising but in the
overall global macro picture there will still be some concern." 
    The Chinese figures helped boost Asian stock markets overnight, while
Wall Street also closed higher thanks to a relatively solid start to the
quarterly reporting season.
    So far, 5 percent of S&P 500 companies have reported, with only one
in three missing earnings expectations, according to Thomson Reuters Starmine.
    In Europe, the results season is not due to start in earnest for another
week, although trading updates so far this week have been mixed. On Thursday,
Tesco, the world's largest retailer reported a rise in underlying
Christmas sales but said its full year outlook was unchanged and the climate in
Central Europe remained tough. 
    "There is still a lot of caution out there and it feels as if they will wait
 to get an idea of how the earnings season is shaping up and what that waits for
the economy going forward," Smith at Knight Capital said.
    The economic picture, though, is not seen as weak enough to prompt any fresh
stimulus measures from the Bank of England and the European Central Bank, both
of which are widely seen announcing unchanged policy on Thursday.
  
    "We are with consensus solidly behind the no change view for both central
banks," economist at UBS said in a note. 
    "(ECB President Mario) Draghi is likely to take comfort from the recent
recovery in risk appetite and as such the Governing Council is likely to shy
away from the negative interest rate discussions for which there was some
appetite late last year," they added.
    
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  MARKET SNAPSHOT AT 0729 GMT:   
                                          LAST     PCT CHG    NET CHG
 S&P 500                              1,461.02      0.27 %       3.87
 NIKKEI                              10,652.64       0.7 %      74.07
 MSCI ASIA EX-JP                                    0.59 %       3.30
 EUR/USD                                1.3059     -0.03 %    -0.0004
 USD/JPY                                 88.19      0.36 %     0.3200
 10-YR US TSY YLD                        1.871          --       0.01
 10-YR BUND YLD                          1.480          --       0.00
 SPOT GOLD                           $1,659.20      0.12 %      $1.91
 US CRUDE                               $93.58      0.52 %       0.48
 
  > GLOBAL MARKETS-Strong China trade data underpins risk assets 
  > US STOCKS-Wall Street rises after Alcoa reports earnings 
  > Japan's Nikkei climbs on weaker yen, strong China data 
  > Prices near flat as gov't debt ceiling debate looms 
  > Yen near 2-1/2-year low, Aussie up on strong China data 
  > Gold hovers below $1,660/oz; eyes on ECB 
  > Copper climbs after brightening China trade data 
  > Brent inches up towards $112 as China data beats expectations 
    
    COMPANY NEWS
   
    VODAFONE 
    The CEO of Verizon Communications said that the group was not in
talks with Vodafone about taking full ownership of their Verizon Wireless
venture, despite market speculation this week that such a deal could happen.
    
    TESCO 
    The world's third largest retailer, named a new British leader as it showed
signs of a revival in its home market with a rise in underlying Christmas sales.
    
    RIO TINTO  
    The world's second-largest iron ore producer, has suspended shiploading at
the ports of Dampier and Cape Lambert due to a cyclone intensifying on the
western coast of Australia. 
    
    BANKS
    Morgan Stanley plans to slash 1,600 jobs in what may be just the
beginning of a new round of layoffs at large investment banks, this time driven
by a deeper reassessment of Wall Street businesses in the face of new
regulations and capital standards. 
    
    MARKS & SPENCER 
    The British retailer reported a bigger-than-expected drop in non-food sales
in the Christmas quarter after deciding to offer fewer discounts just as
Debenhams and other rivals were offering more. 
    
    FIAT 
    The minority owner of Chrysler Group LLC on Wednesday pushed the U.S.
automaker to take the first step toward becoming a public company again by
demanding that company parent Fiat SpA register shares with U.S.
regulators. 
    
    MAN, VW 
    Volkswagen moved to tighten its grip over MAN on Wednesday, saying it wished
to take full control over the Munich-based truck maker. [ ID:nL5E9C9CHU]
      
    SUEDZUCKER 
    Suedzucker said sales in the first nine months of its 2012/13 fiscal year
rose to 6.046 billion euros ($7.9 billion), up 15.3 percent from 5.244 billion
euros in the same time last year. 
    
    ALSTOM 
    Five consortia including companies from Brazil, China, South Korea, Spain
and France have presented bids to build two hydroelectric power stations in
southern Argentina requiring an investment of $5 billion. Bidders include
China's Sinohydro Corp and China Gezhouba Group Corp,
Brazil's Odebrecht and OAS, Alstom, South Korea's
Hyundai Engineering and Construction and Spain's Isolux Corsan,
Argentina's planning ministry said. 
        
    PEUGEOT 
    Banque PSA, the financial arm of the loss-making French car maker, will sign
around 5 billion euros ($6.52 billion) of loans as part of an 18.5 billion euro
debt rescue plan in the next few days, according to bankers. 
         
    CREDIT SUISSE 
    BlackRock Inc has won the bidding for Credit Suisse Group AG's
European exchange-traded fund business, according to a source familiar with the
situation.
    
    NESTLE 
    Nestle Purina PetCare to voluntarily withdraw Waggin' Train and Canyon Creek
Ranch brand dog treat products after trace amounts of antibiotic residue found
in samples.
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