Europe Factors to Watch-Shares set to track Wall Street gains
PARIS, Jan 28 (Reuters) - European stocks are seen rising on Monday, set to gain ground for the fourth straight session and tracking a rally on Wall Street where a surprisingly good start of the earnings season has propelled the S&P 500 above 1,500 points for the first time in more than five years. At 0724 GMT, futures for Euro STOXX 50, for Germany's DAX and for France's CAC were up 0.1-0.2 percent. About 30 percent of S&P 500 companies have reported quarterly results so far in the earnings season, of which 77 percent have met or beat analysts' profit forecast, according to Thomson Reuters data. European shares rose on Friday, with the FTSEurofirst 300 index of top European shares adding 0.3 percent, boosted by forecast-beating German data and bigger-than-expected paybacks of crisis-time loans by banks which fuelled hopes the region is on the recovery path. "All European benchmarks are at their 2012-2013 highs. Every time there's even a slight pull-back, the buying pressure comes in," Aurel BGC chartist Gerard Sagnier said. "We're positive in the short term, although the market will face a serious test with the S&P 500 not far from testing record highs." U.S. and European stocks have been strongly rallying since mid-2012, lifted by bold action from central banks to boost liquidity and tackle the euro zone debt crisis. Fuelling hopes the long-awaited rotation from bonds to stocks may be under way, EPFR Global data showed equity funds outgained bond funds for the seventh straight week last week, although the pace of inflows into stocks slowed. Overall, equity funds absorbed a collective $5.65 billion, of which over 70 percent flowed into emerging markets, during the week ending Jan. 23 while bond funds took in a net $3.71 billion and money market funds saw $6.78 billion redeemed, according to EPFR, with Europe equity funds taking in fresh money for the eighth time in the past nine weeks. So far this year, equity and bond funds have recorded inflows of $39 billion and $18.7 billion respectively. "The overall market sentiment has greatly improved, but institutional investors still have room to raise their exposure to stocks while retail investors remain on the sidelines," said Fabrice Cuchet, global head of alternative investments at Dexia Asset Management. "We're clearly in 'risk-on' mood and tail risks have abated a lot mostly due to central banks' actions, which has brought back some visibility, and the new context is favorable to fundamental strategies such as stock picking and long/short pairs trades." -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0722 GMT LAST PCT CHG NET CHG S&P 500 1,502.96 0.54 % 8.14 NIKKEI 10,824.31 -0.94 % -102.34 MSCI ASIA EX-JP 551.59 -0.52 % -2.88 EUR/USD 1.3445 -0.13 % -0.0018 USD/JPY 90.79 -0.11 % -0.1000 10-YR US TSY YLD 1.956 -- 0.01 10-YR BUND YLD 1.657 -- 0.02 SPOT GOLD $1,661.49 0.18 % $3.00 US CRUDE $96.05 0.18 % 0.17 > GLOBAL MARKETS-Seoul pulls Asian shares down > S&P 500 vaults 1,500 as Wall St extends rally > Nikkei falls after piercing 11,000, earnings awaited > TREASURIES-U.S. 10-year notes steady after sell-off, seen shaky > FOREX-Euro buoyed as crisis fears fade, yen falls > PRECIOUS-Gold languishes near 2-week low as recovery hopes weigh > METALS-Copper climbs on China growth hopes, lofty euro > Brent hovers above $113 ahead of U.S. Fed meeting COMPANY NEWS: ZURICH INSURANCE GROUP Zurich Insurance said it can maintain its dividend policy despite an estimated $700 million in damage claims relating to super storm Sandy. MONTE PASCHI The bank said on Sunday it was seeking a financial investor to help revive its fortunes as the political storm over the derivatives scandal at the ailing bank intensified ahead of next month's Italian election. Enraged shareholders lashed out at its management on Friday as questions grew about central bank oversight of the lender following the uncovering of nearly $1 billion of losses in complex derivatives deals. Prime Minister Mario Monti said the possibility of the bank being nationalised was a "remote hypothesis". DEUTSCHE BANK German regulator BaFin has launched a special probe against four lenders including Deutsche Bank as part of an investigation into possible manipulation of the Europe Interbank Offered Rate (Euribor), the Sueddeutsche Zeitung newspaper reported on Monday. BBVA Spain's second-biggest bank BBVA will in January repay a "meaningful" part of the long-term loans it has taken from the European Central Bank, a spokeswoman said on Friday. SWISS BANKS Switzerland believes it can clinch a deal with U.S. authorities to end investigations into its banks over helping wealthy Americans evade taxes, the country's finance minister said on Saturday. For more, click on: SANOFI Sanofi expects the U.S. Food and Drug Administration to rule on its application for a new multiple sclerosis treatment called Lemtrada by the second half of this year. TELECOM ITALIA The telecoms group is not looking to expand in Latin America, but the company does need to strengthen its infrastructure due to growing regional data traffic, chairman Franco Bernabe told Reuters on Saturday. DAIMLER Sweden's Volvo said it will surpass Daimler as the world's biggest maker of heavy trucks after agreeing to set up a joint venture in China with Dongfeng Motor Group Co., for which it will pay 5.6 billion yuan ($900 million) for a 45 percent stake in the JV. Related news EADS French officials threw support behind former nuclear boss Anne Lauvergeon to be the first chairwoman of EADS on Sunday in a move likely to test efforts to wrest the European aerospace group away from political influence. TOTAL The French oil major's Elgin gas field will not resume full output for months or even years, Chief Executive Christophe de Margerie said. INDITEX Leading global fashion retailer Inditex, parent of Zara clothing brand, said on Sunday it would stop working with two subcontracters after Bangladeshi officials said clothes with its labels were found in the wreckage of a deadly factory fire. For more click on IBERIA International Airlines Group is considering replacing European flights by British Airways and Iberia with services operated by Vueling, the Spanish budget airline that IAG is proposing to buy, reported the Financial Times on Monday, citing two people familiar with the group's thinking. THYSSENKRUPP Europe's steelmakers will probably not close enough mills to put an end to underbidding for contracts as they refuse to learn from past mistakes, a steel executive told a German weekly published on Sunday.
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.