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Europe Factors to Watch-Shares set to rise ahead of HSBC results
August 5, 2013 / 5:23 AM / 4 years ago

Europe Factors to Watch-Shares set to rise ahead of HSBC results

PARIS, Aug 5 (Reuters) - European stocks are set to inch up in early trade
on Monday, tracking gains on Wall Street where the S&P 500 ended at a
record high after tepid U.S. jobs data fuelled expectations of continued support
from the Federal Reserve.
    At 0626 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were up 0.2 percent.
    Friday's lower-than-expected U.S. payrolls report was seen making the Fed
more cautious about scaling back its massive economic stimulus programme, and
cast some doubt on whether the central bank would start reducing its bond
purchases in September.
    A Reuters poll on Friday found that fewer U.S. primary dealers expect the
Fed to begin reducing economic stimulus in September than they did a month ago,
with dealers now split over whether the central bank will cut back on buying in
September or in the following few months. 
    "Investors reasoned that the softer number would make it much less likely
that the Fed would be in the mood to begin a tapering program at its next
meeting in September," CMC Markets Senior Market Analyst Michael Hewson wrote in
a note.
    Fresh data from China was seen supporting the market on Monday, with figures
showing activity in China's services sector slightly expanding last month, as
new business orders recovered from a multi-year low in a sign of resilience.
 
    The banking sector will be in the spotlight on Monday, with HSBC,
Europe's biggest bank, set to report half-year profit, expected to rise 15
percent to more than $14 billion as a three-year cost-cutting plan starts to pay
off. 
    Also on the earnings front, Dutch mail group PostNL reported a
better-than-expected 15.3 percent fall in its underlying second-quarter
operating profit and said it was on track to meet its 2015 targets.
 
    More than half way into Europe's earnings season, 56 percent of STOXX Europe
600 companies have met or beaten analyst forecasts. A particularly
strong batch of results came from France and Germany, where about 80 percent of
blue chips have met or beaten forecasts, according to Thomson Reuters StarMine
data.
    The food sector will also be in focus on Monday after New Zealand's Fonterra
, the world's biggest dairy exporter, said it had found bacteria in some
products that could cause botulism, and said contaminated whey protein
concentrate had been exported to a number of Asian countries including China,
and used in products including infant milk powder and sports drinks.
 
    In response, China has halted the import of some dairy products, while food
producers including Danone said they have recalled products that may
have contained the contaminated whey.
    The euro zone's blue-chip Euro STOXX 50 index gained 2.5 percent
last week, recording its fourth consecutive weekly gain. The index, which has
surged 13 percent since late June, is less than 2 percent below a near two-year
high hit in late May. The benchmark index hit 'overbought territory' on Friday
with its 14-day relative strength index (RSI) reading of 70.
    
--------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0628 GMT: 
                                                        
                                         LAST  PCT CHG  NET CHG
 S&P 500                             1,709.67   0.16 %      2.8
 NIKKEI                             14,258.04  -1.44 %  -208.12
 MSCI ASIA EX-JP                       521.33    0.3 %     1.57
 EUR/USD                               1.3274  -0.05 %  -0.0007
 USD/JPY                                98.40  -0.54 %  -0.5300
 10-YR US TSY YLD                       2.609       --     0.01
 10-YR BUND YLD                         1.639       --    -0.02
 SPOT GOLD                          $1,316.05   0.35 %    $4.55
 US CRUDE                             $107.19   0.23 %     0.25
 
  > GLOBAL MARKETS-Asian shares, dollar soft after tepid US jobs 
  > U.S. STOCKS-Dow, S&P 500 end at record for 2nd day despite tepid jobs 
  > Nikkei slips as stronger yen hits exporters; Toyota down after earnings 
  > FOREX-Kiwi hit by food scare; Aussie falls on flat retail sales 
  > PRECIOUS-Gold inches up on weak jobs data, stimulus hopes 
  > METALS-Copper edges down on dimming outlook for China growth 
  > Brent rises above $109 on China data; Iran comments weigh 
    
    COMPANY NEWS:
    
    DANONE 
    Fonterra's share price and the kiwi dollar slid on Monday after the
dairy giant warned of potentially contaminated products, raising safety concerns
that threaten New Zealand's $9 billion annual dairy trade and prompting China to
halt imports.
    In response, China has halted the import of some dairy products from New
Zealand and Australia, New Zealand's Ministry of Primary Industries said. Food
producers including Danone said they have recalled products that may
have contained the contaminated whey. 
    
    POSTNL 
    Dutch mail group reported a better-than-expected 15.3 percent fall in its
underlying second-quarter operating profit and said it was on track to meet its
2015 targets. 
    
    VEOLIA ENVIRONNEMENT 
    French water and waste group posted a sharp drop in first-half net profit,
hurt by to goodwill impairments and restructuring charges, although the firm
confirmed its earnings objectives for 2013. 
    
    NATIXIS 
    The French bank plans to shed 500 to 700 workers with a voluntary departure
scheme that is to be negotiated with unions in September, the Journal de
Dimanche reported. 
    
    CARREFOUR 
    French billionaire Bernard Arnault and U.S. investment fund Colony Capital
said on Friday they planned to change the structure of their joint shareholding
in retail giant Carrefour. 
    
    ROCHE 
    India has partly revoked patents granted to Roche Holding AG for its breast
cancer drug Herceptin, a spokesman for the drugmaker confirmed on Sunday.
 
    
    TELECOM ITALIA 
    British telecoms provider Vodafone Group is suing Telecom Italia for
abusing its dominant position in Italy, seeking damages of more than 1 billion
euros. 
    
    DAIMLER 
    The carmaker plans to build a new plant in Brazil as rising taxes on foreign
vehicles make it more difficult to sell imported cars in the Latin American
country, a magazine reported on Sunday. 
    
    RWE 
    The German utility will sell its 50 percent stake in U.S. liquefied natural
gas (LNG) company Excelerate Energy to the co-owner, George B. Kaiser, the
company said on Friday.

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