September 17, 2012 / 6:48 AM / 5 years ago

Europe Factors to Watch-Shares set to retreat from highs

LONDON, Sept 17 (Reuters) - European shares were set to retreat on Monday
after the previous session's 14-month highs following the announce of bold
stimulus measures by the U.S. Federal Reserve, with "overbought" trading
conditions seen prompting a number of investors to book a portion of recent
lofty gains.
    Futures for Euro STOXX 50, Germany's DAX and France's CAC
 were down 0.3 to 0.4 percent. Financial spreadbetters earlier expected
Britain's FTSE 100 to fall as much as 0.6 percent.
    The Euro STOXX 50 index's 14-day relative strength index (RSI)
was at 69 - just below 70, which is considered 'overbought'. The blue chip index
rose 2 percent on Friday and is up more than 26 percent since a low in June,
mainly on expectations that central banks would launch additional measures to
boost growth and fight the euro zone debt crisis.
    The FTSEurofirst 300 index of top European shares ended 1.3 percent
higher at 1,120.15 points on Friday, a level not seen since July 2011. The index
has gained 18 percent since a low in June and is up nearly 12 percent this year,
while its RSI was at 65.
    "Profit taking is probably what we are looking at. And this is clearly
logical and even healthy after the steep gains that were recorded during the
last couple of weeks," Philippe Gijsels, head of research at BNP Paribas Fortis
Global Markets, said.
    "Central banks seem determined to flood the world with liquidity. And
history shows that when weak fundamentals collide with a wall of money, the wall
of money, at least in the short run, wins out. This makes every decent pullback
in risky assets a buying opportunity."
    The Federal Reserve's move on Thursday to pump $40 billion into the U.S.
economy each month until it saw a sustained upturn in the weak jobs market and a
recent European Central Bank plan to buy the sovereign bonds of debt market
strugglers had raised investors' appetite for riskier assets such as equities.
    Miners were expected to come under pressure, mirroring a drop in key base
metals prices that fell 0.7 to 1.4 percent after strong gains. The STOXX Europe
600 basic resources index surged 6 percent on Friday, the best sectoral
performer, on expectations the central bank actions would result in an increased
demand for raw materials.
    
     MARKET SNAPSHOT AT 0635 GMT                                    
                                                  LAST     PCT CHG    NET CHG
     S&P 500                                  1,465.77       0.4 %       5.78
     NIKKEI                                   9,159.39      1.83 %     164.24
     MSCI ASIA EX-JP                                        0.26 %       1.35
     EUR/USD                                    1.3125     -0.02 %    -0.0002
     USD/JPY                                     78.27     -0.14 %    -0.1100
     10-YR US TSY YLD                            1.875          --       0.01
     10-YR BUND YLD                              1.700          --      -0.01
     SPOT GOLD                               $1,771.94      0.14 %      $2.48
     US CRUDE                                   $99.04      0.04 %       0.04
 
    * Stocks firm, dollar sags after Fed-inspired rally          
    * Nikkei strikes 3-week high; Fed euphoria lifts cyclicals   
    * Wall Street ends at multi-year highs on Fed                
    * Dollar pinned down by Fed, euro near 4-month high          
    * Brent crude up for 8th day near $117                       
    * Gold hovers near highest in almost 7 months after Fed      
    * LME copper eases; but stays near 4-1/2 mth top on Fed move 
    * Bonds sag as Fed move raises inflation jitters             
    
    COMPANY NEWS:
    
    EADS, BAE 
    British defence group BAE Systems is prepared to ring-fence projects such as
the Trident nuclear submarine programme to calm growing fears over the impact on
security and employment of its planned merger with EADS. 
    EADS is prepared to offer Germany a veto right and job guarantees in a bid
to gain political approval for a merger with Britain's BAE Systems BAES.L,
Financial Times Germany said, citing industry sources. 
    
    TOTAL 
    The French oil group expects to drill eight exploration wells in Uganda by
end 2013, and will spend about $650 million on its activities in the same
period, a senior company official said on Saturday. 
    
    EDF 
    The French power group denied it had requested compensation from the
government over its decision to close the state-controlled energy company's
Fessenheim nuclear power plant. 
    
    AREVA 
    The French nuclear reactor maker expects to benefit in the medium term from
Japan's plans to restart nuclear reactors that were taken offline following the
Fukushima nuclear disaster in 2011, Chief Executive Luc Oursel told Les Echos
newspaper. 
    
    ROYAL DUTCH SHELL 
    The oil major announced a delay to its Alaska drilling plans due to
containment dome aboard the arctic challenger barge being damaged during a final
test. It said the time required to repair the dome have led US to revise our
plans for the 2012-2013 exploration program. 
    
    FIAT The Italian government is calling on Fiat  to clarify its
commitment to Italy after the carmaker reiterated its  multi-billion-euro
investment plan for its home country should not be interpreted as an absolute
pledge. 
    
    TULLOW OIL 
    Uganda has officially revised its estimated oil reserves to 3.5 billion
barrels from 2.5 billion barrels, the commissioner for a state agency in charge
of petroleum exploration and production said on Monday. 
    
    TELECOM ITALIA MEDIA, MEDIASET 
    A range of company have expressed interest for Telecom Italia Media,
including media group Mediaset, several newspapers said on Saturday.
    
    DEUTSCHE POST 
    The company has requested a price hike for delivering standard letters in
Germany to 0.58 euros from 0.55 euros from Jan 1, 2013, it said on Friday, in
what would be the first rate increase for that size of letter in 15 years.
    
    THYSSENKRUPP 
    Deutsche Bahn Chief Executive Ruediger Grube has demanded that
Thyssenkrupp provide information about its role in a rail track cartel within
the next two weeks, German weekly newspaper Bild am Sonntag said.
 
        
    DEUTSCHE BANK 
    Deutsche Bank should introduce a cap for top salaries, and staff do not need
to earn double-digit million euro amounts, Werner Wenning, a member of Deutsche
Bank's supervisory board, told Frankfurter Allgemeine Sonntagszeitung.
 
    
    DEUTSCHE LUFTHANSA 
    Lufthansa's management will present a strategy update to the supervisory
board on Wednesday including plans for a new European low-cost airline,
WirtschaftsWoche said.
 
    VOLKSWAGEN MAN 
    Volkswagen's commercial vehicles division expects a marked decline in demand
from China compared with last year, and sees demand falling in Brazil and
Europe, board member Leif Oestling told Frankfurter Allgemeine Zeitung.

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