Europe Factors to Watch-Shares set to track Wall Street gains

Mon Jan 28, 2013 1:06pm IST

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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