Reuters
European Markets
European Factors to Watch-Shares set for best week in 10 months
Fri, Nov 23 02:44 AM EST

LONDON, Nov 23 (Reuters) - European shares were set to edge higher on Friday and on track for the best week in about 10 months on expectations that the pace of global economic recovery was picking up and Greece was closer to getting the next tranche of aid.

Equity investors were putting their bets on a likely deal on Greece on Monday, when the country's international creditors will hold another round of talks on releasing the next instalment of aid for the debt-stricken country, analysts said.

A senior Greek government official said on Friday that G reece's international lenders have agreed on new measures to cut its debt pile further but it still has to fill a 10 billion euros ($12.9 billion) gap to gain the IMF's approval. [ ID:nA8 E8KI00D] "There seems to be a general consensus that something needs to be done on Greece. Besides Greece, there is a very good chance that we will, before Christmas, have a deal on averting the U.S. 'fiscal cliff'," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.

"These two positive drivers should make for a strong month of December, which traditionally is a fairly good month anyway. We remain buyers of the dips and continue to focus on financials, which will benefit the most from a Greek deal, and on technology." Futures for Euro STOXX 50, Germany's DAX and France's CAC were 0.1 to 0.2 percent higher. Financial spreadbetters earlier predicted Britain's FTSE 100 to open as much as 0.1 percent firmer, hel ped by positive economic data this week.

Figures showed that Germany grew in the third quarter of the year, albeit at a slower rate than previously, helped by exports and private consumption. The data followed robust manufacturing surveys from the United States and China, the world's biggest economies, in the previous two sessions. Investors also focused on a summit of EU leaders to discuss a new seven-year budget. European Council President Herman Van Rompuy adjourned the summit early on Friday to allow time for heads of state and government to study a revised set of proposals, officials said. The officials said EU leaders would gather again at midday (1100 GMT) to open round-the-table negotiations over the long-term budget, a framework of around 1 trillion euros in spending for the years 2014-2020.

The FTSEurofirst 300 is set to rise for a fifth straight session after gaining 0.6 percent to 1,103.43 points in the previous session on strong manufacturing data from China, the world's second biggest economy. The pan-European index climbed to a two-week high on Thursday and is up 3.4 percent so far this week, the best weekly performance since early February.

"Stocks have rebounded on a possible deal over the U.S. Fiscal Cliff and aid payment to Greece. I am still overweight EU stocks compared to U.S.," Ion-Marc Valahu, fund manager at CLAIRINVEST in Geneva, said.

Valahu said he had invested in large-cap stocks having potential to offer attractive dividends yields in the sectors such as telecoms, utilities, energy, banks and insurance, adding that he had an "underweight" stance on defensive stocks.

MARKET SNAPSHOT AT 0733 GMT LAST PCT CHG NET CHG S&P 500 1,391.03 0.23 % 3.22 NIKKEI 9,366.80 1.56 % 144.28 MSCI ASIA EX-JP 0.91 % 4.69 EUR/USD 1.2904 0.17 % 0.0022 USD/JPY 82.35 -0.12 % -0.1000 10-YR US TSY YLD 1.697 -- 0.02 10-YR BUND YLD 1.442 -- 0.01 SPOT GOLD $1,731.90 0.16 % $2.85 US CRUDE $87.19 -0.22 % -0.19 * Asia shares set for best week in 2 months * Nikkei climbs 1.6 pct to 6-1/2 month high on softer yen * Yen edges up after slide; Greece optimism supports euro * LME copper steady, eyes second week of gains on China * Brent falls towards $110 on weak Europe data * Gold headed for weekly gain, US fiscal worry supports COMPANY NEWS VOLKSWAGEN The company plans to invest 14 billion euros ($18.04 billion) in China over the next four years, its China chief was quoted by the China Daily newspaper as saying, as it speeds up its expansion in the world's largest autos market.

EDF The French state-owned power group said its board had decided to pay an interim cash dividend of 0.57 euros per share to shareholders on Dec. 17.

SIEMENS The German industrial conglomerate is expected to present details on the planned spin-off of its Osram lighting unit on Nov. 28, sources told Reuters.

XSTRATA Miner Xstrata has completed construction of the first production line of the smelter at its Koniambo ferronickel project in New Caledonia and expects the first metal to be produced from the site in January 2013. BMW The German carmaker sees continued double-digit sales gains in China next year as the luxury car market there, at 9-10 percent of overall sales, still lags the developed world, where the luxury segment accounts for 15 percent of the total. EADS Germany plans to buy a 3 percent stake in planemaker EADS from France as the two governments strive to take equal stakes in the Airbus parent, German daily Handelsblatt reported, citing German government sources. DELTA LLOYD Dutch insurer Delta Lloyd has cancelled the sale of its German operations to Nomura Holdings because of worsened economic circumstances and difficulty in gaining approval from German regulator BaFin. UBS UBS is nearing a settlement in the coming days with regulators in Switzerland and Britain for control failures that led to a $2.3 billion rogue trading loss, a person familiar with the matter said on Thursday. For related news, click on BANCA MONTE DEI PASCHI DI SIENA Italy's government is set to take a bigger stake than originally expected in Banca Monte dei Paschi di Siena after the European Commission demanded changes to a state aid scheme for the country's third biggest lender.


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