Europe Factors to Watch-Shares set to rise after surprise BoJ easing
PARIS, Oct 31 (Reuters) - European stocks were set to rally on Friday after the Bank of Japan stunned global financial markets by easing policy further, sending Tokyo's Nikkei index surging 4.8 percent. At 0723 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were up 1.5-2.4 percent. The Bank of Japan will increase the pace at which it expands base money to about 80 trillion yen per year, up from a previous target of 60-70 trillion yen. The BOJ also decided to increase its purchases of government debt by about 30 trillion yen and extend the average duration of JGB holdings to around 10 years, and decided to triple its purchases of exchange-traded funds and Japan real estate investment trusts. Also boosting equity markets, sources told Reuters a Japanese government panel overseeing the Government Pension Investment Fund (GPIF) approved plans for the fund to raise its holding of domestic stocks to 25 percent of its portfolio from a current 12 percent. "While we may have seen the end of the Federal Reserve's bond buying programme for the time being and the ECB reluctant to step into the breach, it appears that the Bank of Japan has no such qualms, filling the void left by the US central bank as overnight they surprised the markets with the announcement of a fresh bout of monetary stimulus," Michael Hewson, chief market analyst at CMC Markets, said in a note. Banking stocks will be in focus after BNP Paribas, France's No. 1 bank, said third-quarter net income rose 11 percent from a year ago as gains in fixed income trading and in international retail offset a lacklustre economic environment in its core European markets. Anheuser-Busch InBev will also be in the spotlight after the world's largest beer maker reported a lower-than-expected increase of earnings in the third quarter as U.S. wholesalers cut inventories and Brazil was stagnant after the soccer World Cup. So far in Europe's earnings season, 36 percent of companies have reported results, of which 67 percent managed to meet or beat profit forecasts, and 59 percent met or beat revenue forecasts, according to Thomson Reuters StarMine data. In absolute terms, profits are up 7.1 percent, while revenues are up 0.1 percent, highlighting the fact that Europe's earnings rebound has mostly been coming from cost-cutting and lower financing costs. Europe bourses in 2014: (link.reuters.com/pad95v) Asset performance in 2014: (link.reuters.com/rav46v) ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0717 GMT: LAST PCT CHG NET CHG S&P 500 1,994.65 0.62 % 12.35 NIKKEI 16413.76 4.83 % 755.56 MSCI ASIA EX-JP 485.03 0.71 % 3.41 EUR/USD 1.2557 -0.44 % -0.0055 USD/JPY 111.31 1.93 % 2.1100 10-YR US TSY YLD 2.348 -- 0.04 10-YR BUND YLD 0.864 -- 0.01 SPOT GOLD $1,171.40 -2.27 % -$27.24 US CRUDE $81.02 -0.12 % -0.10 > GLOBAL MARKETS-JAPAN SHARES UP AS BOJ STUNS WITH MORE MEASURES > US STOCKS-WALL ST UP ON GDP, EARNINGS; FUND YEAR-END LIFTS WINNERS > NIKKEI CLOSES AT HIGHEST SINCE 2007 AS BOJ UNEXPECTEDLY EASES > TREASURIES-PRICES INCH UP BUT OFF PEAKS ON JAPAN EQUITY BUYS REPORT > FOREX-YEN SLIDES TO 7-YEAR LOW AFTER BOJ SURPRISES WITH MORE EASING > GOLD LANGUISHES BELOW $1,200; SILVER TUMBLES TO 4-1/2 YEAR LOW > METALS-LONDON COPPER STEADY, SET TO POST SMALL MONTHLY GAIN > BRENT FALLS BELOW $86, HEADS FOR WORST MONTH SINCE 2012 COMPANY NEWS: BNP PARIBAS France's No. 1 bank, said third-quarter net income rose 11 percent from a year ago as gains in fixed income trading and in international retail offset a lacklustre economic environment in its core European markets. ANHEUSER-BUSCH INBEV The world's largest beer maker reported a lower-than-expected increase of earnings in the third quarter as U.S. wholesalers cut inventories and Brazil was stagnant after the soccer World Cup. NOKIAN RENKAAT Finnish tyre maker Nokian Renkaat reported quarterly profit below market expectations and said its full-year operating profit could end up 22 percent lower from the previous year due to weak sales in Russia. DANONE Danone will buy a 25 percent stake in China's Yashili International Holdings Ltd for $550 million, gaining an additional route into the booming Chinese market for infant milk formula. RIO TINTO Rio Tinto Plc looked set to take a $2.5 billion writedown on its huge but troubled copper project in Mongolia, the Times reported, after construction of the $5 billion Oyu Tolgoi became caught up in a tax dispute with the government. ROYAL BANK OF SCOTLAND RBS said it had set aside 400 million pounds ($639 million) to cover potential fines for manipulating currency markets and another 100 million pounds to compensate customers mis-sold loan insurance. WPP WPP posted a lower-than-expected 3 percent rise in third-quarter like-for-like net sales on Friday and said it expected the fourth quarter to slow from the rate recorded in the first nine months. INTERNATIONAL AIRLINES GROUP The group reported a 30 percent jump in third-quarter profit and upgraded its forecast for the year, reassuring investors after the British Airways-owner's strike-hit rivals cut their guidance. MONTE DEI PASCHI DI SIENA Moody's said on Thursday it might cut the credit ratings of the Tuscan lender after pan-European health checks unveiled capital shortfalls for the bank. EUTELSAT The satellite operator said it was targeting full-year organic revenue growth of 4 percent after fiscal first-quarter revenue rose 4.21 percent to 357.6 million euros. ATLANTIA France will cancel a multi-million-euro contract with a consortium led by the Italian group after scrapping the "ecotax" road toll the consortium was to collect, a junior minister said on Thursday. Atlantia, which owns 70 percent of Ecomouv, reacted by saying that the contract safeguards its investments. FERROVIAL Spanish infrastructure group Ferrovial late on Thursday said its earnings before interest, depreciation and amortisation (Ebitda) rose 11 percent to 701 million euros (884 million US dollar) in the first nine months of the year, compared to 2013. (Reporting by Blaise Robinson)
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