European Factors to Watch-Shares to edge higher, focus on BHP, ZEW

martes 18 de febrero de 2014 03:40 GYT

LONDON Feb 18 (Reuters) - European shares were expected to extend gains on Tuesday, with investors betting that German economic sentiment data will be encouraging and strong results from BHP Billiton will support basic resources stocks.

The Mannheim-based ZEW economic think tank's poll of German economic sentiment for February, due at 1000 GMT, is expected to have steadied at 61.7, while the forecast for current conditions is seen rising to 44 from 41.2 in the previous month.

"Any further improvement (in German ZEW) would back the idea that the current recovery has legs, with business confidence returning to all euro zone member states and not only to Germany," Credit Agricole said in a note.

Investors will also scrutinise UK inflation numbers, to be released at 0930 GMT. Inflation, based on the consumer price index, is forecast to show a fall in January from a month earlier. For the year, inflation is likely to show a reading of 2 percent, in line with the Bank of England' target.

Analysts said a soft reading of inflation numbers would mean that the central bank will keep rates lower for a longer time.

The market's spotlight will also be on company earnings, with French retailer Casino posting an 18.1 percent rise in 2013 operating profit and expecting its sales and profits to grow this year.

Basic resources stocks could get some support after global miner BHP Billiton topped forecasts with a 31 percent rise in first-half profit and hinted it may launch a share buyback in August, despite a cautious outlook on Chinese growth.

European shares have been helped by relatively good corporate results in the current earnings season, with 58 percent of companies reporting in-line or better-than-expected profits, according to Thomson Reuters Starmine data.   Continuación...