European Factors to Watch - Shares supported by cbank stimulus
LONDON, Feb 25 (Reuters) - European stocks were seen nudging higher at the open on Monday, cheered by signs that the United States and Japan will continue with ultra easy monetary policy for some time yet, but uncertainty surrounding the Italian elections was expected to keep a lid on market gains. Federal Reserve officials late on Friday highlighted the merits of the U.S. central bank's bond-buying programme, reassuring investors that stimulus is not about to be removed and helping Wall Street post solid gains. Asian shares also rose overnight after sources said Japan is likely to nominate a proponent of aggressive monetary easing as its next central bank governor, sending Tokyo's benchmark Nikkei 225 share index to 4-1/2 year highs . "We still think we are in a pretty condusive environment for equities," said Ian Richards, head of equity strategy at Exane BNP Paribas. "We think it's a bit early to be too early to be too worried about the end of QE (quantitative easing)," he added, noting that the equities market was in a sweetspot of ample central bank liquidity, signs of some global economic improvement and not overly challenging valuations. At 0726 GMT, futures for Euro STOXX 50 were up 0.7 percent, following on from strong gains in the euro zone's blue-chip index on Friday. Futures for Germany's DAX and for France's CAC each added around 0.5 percent, while those for FTSE 100 lagged slightly with a 0.3 percent gain following Moody's downgrade on Britain's sovereign credit rating at the end of last week. Faced with a relatively light corporate and data calendar, investors were expected to focus on the uncertain outcome of the Italian elections, where voting finishes later on Monday. "The focus this week should be on the political front and there could be significant downside risks ahead," analyst at Credit Agricole said in a note. "A clear victory of the centre-left coalition (in Italy) ... would likely be the most market-friendly outcome. On the other hand, a hung parliament or another situation leading to political instability and a slowdown in the reform momentum would likely lead to a widening in sovereign spreads as well as negative implications for business confidence and the economy." Investor sentiment was also likely to be dampened by news that the pace of growth in China's manufacturing sector pulled back from a five-year high this month, according to the HSBC's purchasing manager's index, hit by stagnant exports. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0722 GMT: LAST PCT CHG NET CHG S&P 500 1,515.60 0.88 % 13.18 NIKKEI 11,662.52 2.43 % 276.58 MSCI ASIA EX-JP 553.35 -0.08 % -0.42 EUR/USD 1.322 0.27 % 0.0035 USD/JPY 94.24 0.92 % 0.8600 10-YR US TSY YLD 1.976 -- 0.01 10-YR BUND YLD 1.574 -- 0.01 SPOT GOLD $1,585.31 0.32 % $5.01 US CRUDE $93.17 0.04 % 0.04 > GLOBAL MARKETS-Asian shares edge higher, yen falls on BOJ report > Nikkei soars to 4-1/2-yr high; Kuroda seen likely next BOJ governor > HP lifts Wall St but S&P posts year's first down week > TREASURIES-U.S. bond prices firm before Bernanke's testimony > FOREX-Yen & sterling slump, euro eyes Italy elections > PRECIOUS-Gold bounces on physical buying, off 7-mth low > METALS-London copper snaps 6 days of losses, but China weighs > Brent slips below $114 as China factory output retreats from 2-yr high * SIEMENS, NOKIA : The German industrial bellwether Siemens will speed up efforts to exit or cut its 50 percent stake in its telecom equipment joint venture with the Finnish phone maker, the Financial Times reported on Sunday. * RBS - The British state-backed lender is set to signal this week that it plans a partial sale of its U.S. bank Citizens this year or next, a source close to the matter said. * VIVENDI - The French media group is likely to close a deal in the coming weeks to sell a stake in Brazilian telecoms unit GVT, after getting the government's nod to close a deal with DirecTV or a group of funds led by KKR & Co, newspaper Folha de S.Paulo reported. * ASSOCIATED BRITISH FOODS - The firm forecast first half results ahead of its expectations at the start of the year, driven by the performance of its Primark discount fashion chain. * CREDIT SUISSE - The U.S. Attorney's Office in New Jersey is investigating the Swiss-lised bank over mortgage-backed securities packaged and sold by the bank, according to people familiar with the matter. * POSTNL - The Dutch firm says fourth quarter net profit was 155 million euros versus Reuters poll average of 82.4 million. * MARKS AND SPENCER - The retailer failed to pull in new year sales shoppers, with reports suggesting it lost ground to rivals Primark and Zara, The Independent reports. * RAIFFEISEN BANK - The Austrian lender may have to write down more assets, its CEO said in a newspaper interview.
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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.