European Factors to Watch-Shares seen edging higher, focus on miners

viernes 28 de marzo de 2014 03:41 GYT

LONDON, March 28 (Reuters) - European equities headed for a slightly higher open on Friday, with basic resources shares seen advancing on expectations that China's possible move to step up infrastructure spending could boost industrial metals demand.

Recent weaker-than-expected data, which has dimmed outlook for the world's second-largest economy, prompted Chinese Premier Li Keqiang to say that Beijing was ready to support the cooling economy and would push ahead with infrastructure investment.

A pick up in infrastructure spending in China has the potential to lift prices of metals and help the European basic resources index, which has fallen more than 13 percent this year on concerns that authorities were set to let growth slow down in China, the world's largest metals consumer.

"The increased spending on infrastructure can boost basic resources shares in the short term. However it would demonstrate again that Chinese reforms are a process of one step forward and two steps backward," Koen De Leus, senior economist at KBC, in Brussels, said.

At 0733 GMT, futures for Britain's FTSE 100, Germany's DAX and France's CAC were 0.1 to 0.3 percent higher, while futures for the Euro STOXX 50 were up 0.3 percent at 3,076 points.

Commerzbank said the Euro STOXX 50 futures recently provided a trading buy signal and given an improvement in overall technical conditions, investors should consider a sale of May puts at a strike price of 2,750 or 2,800.

In the cash market, the FTSEurofirst 300 of top European shares ended 0.2 percent higher at 1,322.22 points on Thursday. However, the index was on track to end the month in negative territory after recent sell-offs on growth concerns and geopolitical tension in Ukraine.

Investors will also keep an eye on inflation data out of the euro zone due on Friday and on Monday for hints about the European Central Bank's likely policy move. Analysts expect the inflation number to come in at 0.6 percent in March, against 0.7 percent in the previous month.

"A larger downside surprise to euro zone inflation, say to 0.5 percent year-on-year, could justify a rate cut as early as next week, although without a smoking gun the ECB might further delay its monetary response," Credit Agricole said in a note.   Continuación...