Europe Factors to Watch-Shares set to rise on ECB, China stimulus hopes

by Reuters
Monday, 31 March 2014 06:24 GMT

PARIS, March 31 (Reuters) - European stocks were seen opening slightly higher on Monday, adding to last week's strong gains, helped by speculation the European Central Bank could ease policy while China might take steps to stimulate its economy. At 0615 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were up around 0.2 percent. All eyes will be on the euro zone inflation figures, due at 0900 GMT on Monday. A surprise fall in inflation for Spain and Germany on Friday raised pressure on the ECB to take additional measures to ward off the threat of deflation. Annual inflation in the euro zone has been in what ECB President Mario Draghi has called the "danger zone" below 1 percent for five months. The ECB has a policy meeting on Thursday. "With the downward trend of disinflation looking fairly solid, and the threat of deflation just around the corner, another weak number will fuel speculation that the ECB will have to start firing off bazookas, possibly as early as this Thursday's meeting," Capital Spreads trader Jonathan Sudaria wrote in a note. Italian banks will be in focus on Monday after the head of Italy's banking association ABI said the country's banks will not require any state funds as a result of the ECB's stress tests this year. Speculation of fresh stimulus measures in China also helped lift the mood. Premier Li Keqiang sought to reassure markets that Beijing was ready to support the cooling economy, saying the government had the necessary policies in place and would push ahead with infrastructure investment. The euro zone's blue-chip Euro STOXX 50 index has gained 6.9 percent since a low hit in mid-March, and is just a few points shy of its 2014 high hit in late January, at 3,176.99. If it breaks above it, the index would be trading at a 5-1/2 year high. "The index should cross its 2014 high this week, with a target of 3,400 points on the upside. The buying pressure is intensifying, and the momentum is strongly bullish," Aurel BGC chartist Gerard Sagnier said. Europe bourses in 2014: Asset performance in 2014: ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0619 GMT: LAST PCT CHG NET CHG S&P 500 1,857.62 0.46 % 8.58 NIKKEI 14,827.83 0.9 % 131.8 MSCI ASIA EX-JP 468.75 0.42 % 1.98 EUR/USD 1.3754 0.01 % 0.0002 USD/JPY 102.85 0.06 % 0.0600 10-YR US TSY YLD 2.728 -- 0.02 10-YR BUND YLD 1.550 -- 0.00 SPOT GOLD $1,295.65 0.17 % $2.15 US CRUDE $101.41 -0.26 % -0.26 > GLOBAL MARKETS-Asian stocks rise on hopes of China stimulus > US STOCKS-Wall St ends higher but biotech selloff weighs > Nikkei hits 2-1/2-wk high on China hopes, soft yen spurs exporters > FOREX-Yen struggles, euro subdued ahead of inflation data > PRECIOUS-Gold struggles below $1,300, hovers near six-week low > METALS-London copper set for biggest monthly loss since June > Brent holds above $107 as Europe tensions offset Iraq output COMPANY NEWS: SCANIA VOLKSWAGEN Swedish pension firm AMF said late on Sunday it had rejected Volkswagen's bid to mop up minority shareholders in truck maker Scania. SWATCH Sales at Swatch, the world's biggest watchmaker, could reach 10 billion Swiss francs ($11 billion) next year, its chief executive said in a newspaper interview on Sunday. ENI Knight Vinke Asset Management sold its nearly 1 percent of the oil and gas group last week because of concerns over how ENI will choose its next chief executive, the head of the U.S-based activist investor said on Friday. BANCO POPOLARE The Italian bank has re-appointed its top management for another three years ahead of a 1.5 billion-euro ($2 billion) share issue that starts on Monday. DEUTSCHE TELEKOM Deutsche Telekom plans to cut 2,000 to 2,500 jobs outside Germany at its IT services business T-Systems, in addition to 4,900 cuts planned in Germany, German magazine Focus reported on Saturday, citing supervisory board sources. UBS A federal judge in Manhattan has ruled that a group of international banks including UBS must face complaints that they violated the U.S. Commodity Exchange Act by manipulating yen-denominated interest rate benchmarks between 2006 and 2010. UNICREDIT Italy's top bank could raise more than 1 billion euros form the sale of its impaired loan manager, Il Messagero wrote on Sunday. The paper said Fortress and Blackstone were strongly interested. BMW BMW will expand production capacity in the United States by 50 percent and introduce another new offroad model, the German luxury carmaker said on Friday, in what amounts to a $1 billion bet on sport utility vehicles (SUVs). ACS, FCC, FINMECCANICA A consortium led by European firms Finmeccanica and Spain's ACS won a contract for a $5.66 billion subway line in Lima after competitors unexpectedly dropped out of the contest last week, Peru's state investment agency said on Friday. OUTOKUMPU The Finnish stainless steel maker on Sunday agreed to push back the planned closure of its plant in Germany until at least August 2015 and offer its workers compensation as well as jobs elsewhere. SOCIETE GENERALE The Libyan Investment Authority has accused France's second-biggest bank of funnelling bribes worth tens of millions of dollars to associates of Saif al-Islam, the son of former Libyan leader Muammar Gaddafi, the Financial Times reported. LAGARDERE The French media group said it was looking over bids for the magazines it has put up for sale this weekend and would announce its decision shortly. Le Figaro that said a joint offer from Belgium's Rossel and France's Reworld Media MLREW.PA had won the bidding, citing unidentified sources. LUFTHANSA Venezuela's government will allow foreign airlines such as Lufthansa to repatriate $3.8 billion in ticket sales revenues that had been stuck inside the country due to currency controls, Venezuela's airline industry association said on Friday. RWE RWE said it signed a contract to sell oil and gas production arm DEA to a group of investors led by Russian tycoon Mikhail Fridman, sealing a deal that has been criticised by senior German politicians amid the Crimea crisis. (Reporting by Blaise Robinson; Editing by Atul Prakash)

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