January 22, 2013 / 6:31 AM / 5 years ago

Europe Factors to Watch-Shares set to dip; U.S. earnings eyed

PARIS, Jan 22 (Reuters) - European stocks are set to dip on Tuesday,
slipping from the previous session's gains as investors await quarterly results
from a flurry of U.S. bellwethers such as Google, IBM and J&J
, seeking clues on the outlook for corporates worldwide.
    At 0723 GMT, futures for Euro STOXX 50, for Germany's DAX 
and for France's CAC were down 0.06-0.15 percent.
    "The week will be driven by U.S. earnings, with 84 S&P500 companies
reporting from sectors such as tech, industrials, aerospace and consumer
products. By the end of the week, we'll have a pretty good idea of the overall
corporate results, and most importantly the outlook for the first part of this
year," Aurel BGC Head of Global Research Christian Parisot said.
    Bold new measures unveiled by the Bank of Japan on Tuesday to revive the
economy initially sparked a rally on the Tokyo bourse, but investors quickly
booked profits on the Nikkei, which has jumped 25 percent since
    Spain will also be in focus on Tuesday, after a government source told
Reuters the country is testing the market for a 10-year syndicated bond, whose
issue could materialise as early as Tuesday when initial price expectations are
expected to emerge in the morning. 
    Shares of financial services institutions such as market operators will be
in focus on Tuesday as European Union finance ministers are set to give their
approval for 11 euro zone countries including Germany and France to start
preparations for imposing a tax on all financial market transactions.
    U.S. markets are set to reopen after being closed on Monday for a public
    European shares gained ground on Monday, climbing back towards near two-year
highs, with investors buying into relatively undervalued sectors such as
utilities and steel as they bet Europe's economy will improve.
    Investors have been scooping up European shares in the past two months -
with the Euro STOXX 50 surging 13 percent since mid-November - as fears about a
potential break up of the euro zone abated and global macroeconomic data
    Despite the brisk two-month rally, European equities remain relatively
cheap, with about a third of the stocks listed on the Euro STOXX 50 still
trading below their book value, according to Thomson Reuters data.
    The asset class is also seen as attractive relative to bonds, with an
average dividend yield of 3.5 percent while the Bund yield is around 1.5
percent, a 200 basis point spread.
    The spread has tightened since hitting a record high of 280 basis points
last June, but remains well above historical levels. 
 MARKET SNAPSHOT AT 0719 GMT                            
                                         LAST  PCT CHG  NET CHG
 NIKKEI                             10,709.93  -0.35 %   -37.81
 MSCI ASIA EX-JP                       561.77   0.25 %     1.40
 EUR/USD                               1.3362   0.38 %   0.0050
 USD/JPY                                89.12  -0.51 %  -0.4600
 10-YR US TSY YLD                       1.865       --     0.03
 10-YR BUND YLD                         1.595       --     0.00
 SPOT GOLD                          $1,693.71   0.25 %    $4.16
 US CRUDE                              $95.67   0.12 %     0.11
  > GLOBAL MARKETS-BOJ easing spurs volatile yen, Asian shares up 
  > U.S. bonds slip slightly in Asia; U.S. debt ceiling in focus 
  > EURO GOVT-Bunds steady as investors await new Spanish bond 
  > Nikkei falls as post-BOJ gains erased by profit-taking 
  > Yen firms on BOJ's open-ended asset buying pledge for 2014 
  > Copper up on China prospects; supply rise caps gains 
  > Brent up near $112 on better global economic outlook 
    The company is set to report earnings from continuing operations in its
fiscal first quarter of about 1.3 billion euros ($1.7 billion), a German
newspaper reported, which would be little changed from a year earlier but better
than expected. 

    The power and transport engineering company on Tuesday said orders rose 3
percent in the third quarter, driven by demand for trains and several
small-to-medium-sized contracts for power plant equipment. 
    The European aerospace and defence group achieved a "very significant
improvement" in revenue and operating profit in 2012, Chief Executive Tom Enders

    The fall in the spread between Italian 10-year bonds and their German
equivalent has helped the capital position of Italy's Banca Monte dei Paschi di
Siena, the lender's chairman said on Monday. 
    Newspaper Handelsblatt cited industry sources as saying the engineering
conglomerate's earnings from continued businesses in the fiscal first quarter
was flat from a year ago at about 1.3 billion euros ($1.7 billion). Siemens was
not immediately available for comment. Related news 
    Spain's Iberdrola sold 1 billion euros ($1.3 billion) of a new
eight-year benchmark bond on Monday in a fresh push to raise funds and clean up
its debt portfolio. 
   The world's largest maker of corrective lenses, said it had struck deals in
several fast-growing markets as part of its bid to boost revenue from emerging
countries by 2015. 
    A consortium led by Spain's Enagas said on Monday it would not
submit an offer for TIGF, the gas network and storage business of French oil
company Total.
    The French nuclear reactor maker and Japan's Toshiba Corp are
considering bids for nuclear fuel producer Urenco, but British, German and Dutch
authorities disagree over what to do with the ultra-secret firm, industry
sources said. 
    The U.S. market for high-end luxury goods rebounded in 2012 as consumer
sentiment improved, the head of Christian Dior, one of France's biggest fashion
brands, said. 
   Norway's $700 billion oil fund is now the second-biggest shareholder in the
worlds number 2 truck-maker with a stake of 4.7 percent, daily Dagens Industri
    The Toronto and Stockholm-listed firm said late Monday it would buy cobalt
refinery Kokkola in Finland with a joint-venture partner from OM Group.
    Jorma Ollila, chair of Royal Dutch Shell board and former Nokia CEO and
chairman, is to become the new chairman of stainless steel firm Outokumpu, daily
Helsingin Sanomat reported.
    The group clinched European approval for the first vaccine against
meningitis B, and will seek to sell the drug as soon as possible.
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