Europe Factors to Watch-Shares set to halt pull-back; Repsol eyed
PARIS, Dec 16 (Reuters) - European shares were seen steady on Tuesday, halting their week-long sell-off, with Repsol in focus after the Spanish oil firm said it will launch a takeover bid for Canada's Talisman Energy worth $8.3 billion. A sharp drop in oil prices since June has dragged down valuations for oil producers and oil services companies and sparked the biggest consolidation wave in the sector on records going back to the 1970s, according to Thomson Reuters data. European shares tumbled on Monday, adding to last week's sharp sell-off as the relentless drop in oil prices hurt energy shares and fuelled fears of deflation in the euro zone. The broad STOXX 600 has dropped 7.9 percent in the past six sessions, representing a wipeout in market capitalisation of roughly $710 billion, nearly the size of Saudi Arabia's annual GDP. However, futures for Euro STOXX 50, for Germany's DAX and for France's CAC were flat to up 0.1 percent on Tuesday at 0721 GMT. "Don't be fooled in to thinking this is a sign of a reversal in sentiment and bargain hunters stepping up to the plate, it's probably more to do with shorts booking some profits following the 7-9 percent slumps we've seen in the major European indices over the last week," Capital Spreads trader Jonathan Sudaria wrote in a note. "Equities seem to be inextricably tied to oil prices now and with OPEC saying they are comfortable with $40 a barrel, it looks like there could be a lot more pain ahead for the bulls." Companies with a strong exposure to the Russian economy such as Austrian lender Raiffeisen Bank International and Danish brewer Carlsberg will be in the spotlight on Tuesday, after Russia's central bank raised its key interest rate to 17 percent from 10.5 percent in an emergency move to halt a collapse in the rouble as the economy slides toward recession. On the macro front, investors were rattled by downbeat macro data from China on Tuesday. The flash HSBC/Markit manufacturing purchasing managers' index (PMI) fell to 49.5 in December, below the 50.0 reading forecast by analysts, signalling that activity in China's factory sector shrank for the first time in seven months. The Bank of England said on Tuesday Britain's main banks would be able to withstand a sharp fall in house prices, other than the troubled Co-operative Bank. State-backed RBS and Lloyds only scraped through the BoE's first sector-wide test of the health of major lenders. Europe bourses in 2014: (link.reuters.com/pad95v) Asset performance in 2014: (link.reuters.com/rav46v) ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0721 GMT: LAST PCT CHG NET CHG S&P 500 1,989.63 -0.63 % -12.7 NIKKEI 16755.32 -2.01 % -344.08 MSCI ASIA EX-JP 453.36 -0.71 % -3.24 EUR/USD 1.2459 0.18 % 0.0023 USD/JPY 117.26 -0.46 % -0.5400 10-YR US TSY YLD 2.110 -- -0.01 10-YR BUND YLD 0.632 -- 0.00 SPOT GOLD $1,197.51 0.44 % $5.30 US CRUDE $55.38 -0.95 % -0.53 > GLOBAL MARKETS-ROUBLE JUMPS ON RUSSIA RATE HIKE, OIL PRESSURED > US STOCKS-WALL ST DIPS IN VOLATILE TRADE; OIL PRICES FALL FURTHER > TOKYO'S NIKKEI SHARE AVERAGE CLOSES DOWN 2.01 PCT > FOREX-YEN FIRM AS OIL SLUMP CURBS RISK APPETITE, ROUBLE REBOUNDS > PRECIOUS-GOLD EDGES UP AFTER WORST DAY IN A YEAR, FED EYED > METALS-LONDON COPPER MIRED NEAR 1-WEEK LOWS ON CHINA WORRIES > OIL PRICES FALL, STUMBLING EMERGING MARKETS DENT OUTLOOK COMPANY NEWS: REPSOL Spanish oil firm Repsol on Tuesday said it would launch a takeover offer for 100 percent of Talisman Energy shares worth $8.3 billion. METRO German retailer Metro AG said it expected "satisfactory" Christmas trading despite a slow start to the season in its home market after it reported quarterly operating profit ahead of expectations. CARLSBERG Chief Executive Jorgen Buhl Rasmussen told daily Jyllands-Posten analysts have priced in too much discount on the brewer's stock related to its Russian business. Rasmussen said the share price did not reflect the value of the business in Russia and repeated that though the Russian market was under pressure now, this was likely to change in future. ORANGE Britain's BT has entered into exclusive talks with Orange and Deutsche Telekom to buy EE for 12.5 billion pounds, opting for the country's biggest mobile operator over rival suitor, Telefonica's O2. DANONE Ratings agency S&P revised its outlook on the dairy group to negative from stable, saying its current debt leverage combined with potentially challenging operating conditions in some markets, as well as integration risks in conjunction with in-fill acquisitions in emerging markets, could weigh on its intermediate financial risk profile and 'A-' rating. LAFARGE European Union antitrust regulators approved the proposed merger of France's Lafarge and Swiss peer Holcim to create the world's biggest cement maker. FIAT CHRYSLER AUTOMOBILES The auto group has resumed exports from Brazil to Mexico after a more than three-year hiatus due to weak Brazilian demand and a more favorable exchange rate, Cledorvino Belini, chief executive officer in Latin America, said on Monday. TOTAL Environmental permit delays are likely to set back the Brazilian offshore drilling activities of the French oil company by about a year, a senior executive said. TODS, SALVATORE FERRAGAMO Bad relations between the EU and Moscow have helped cut exports of Italian shoes to Russia by around a fifth, the sector said in a letter to the bloc's foreign policy chief, urging consideration of economic effects before more sanctions are imposed. DEUTSCHE BOERSE The exchange operator said on Monday that it increased its stake in Tradegate to almost 15 percent. Separately, the two options exchanges run by International Securities Exchange Holdings, the New York-based unit of Deutsche Boerse AG, were halted on Monday following connectivity issues, leading several U.S. options exchanges to declare "self-help" against them. Self-help occurs when an exchange is dealing with internal problems processing trades and needs to send orders through alternate venues. ADP The French airport operator said Paris airport traffic rose 2 percent in November to 6.8 million passengers. JCDECAUX The outdoor ad group signed a deal to buy, in partnership with community-owned investment company Royal Bafokeng Holdings, Continental Outdoor Media, which it called the leader in outdoor advertising in Africa. DEUTSCHE TELEKOM Britain's BT BT.L has entered exclusive talks with the owners of EE for a potential 12.5 billion-pound ($19.6 billion) acquisition deal to give the former UK state telecoms firm the top position in mobile as well as fixed line broadband services. (Reporting by Blaise Robinson; Editing by Atul Prakash)
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