Europe Factors to Watch-Shares to fall after ECB decision on Greek debt
PARIS, Feb 5 (Reuters) - European stocks were set to fall on Thursday after the European Central Bank abruptly cancelled its acceptance of Greek bonds in return for funding, which means the Greek central bank will have to provide its banks with tens of billions of euros of additional emergency liquidity in the coming weeks. At 0740 GMT, futures for Euro STOXX 50, for Germany's DAX and for France's CAC were down 0.8-1.3 percent. The ECB move, which required the support of a majority of central bank chiefs across the euro zone, shows widespread dismay with the new Greek government's plans not only in Frankfurt but across the 19-country bloc. "This effectively means banks cannot use Greek government debt as collateral for loans," IG market strategist Stan Shamu wrote in a note. "The ECB went as far as saying it can no longer assume bailout negotiations will be concluded successfully. Given Syriza was voted in to make some changes and take an aggressive stance, many now fear this will not be taken easily by the Greek population if the new government yields." Resource-related shares will be in focus after China's central bank made a system-wide cut to bank reserve requirements on Wednesday, the first time it has done so in over two years, to unleash a fresh flood of liquidity to fight off economic slowdown and looming deflation. The announcement cuts reserve requirements - the amount of cash banks must hold back from lending - to 19.5 percent for big banks, a reduction of 50 basis points that would free up 600 billion yuan ($96 billion) or more held in reserve at Chinese banks - which could then inject 2-3 trillion yuan into the economy after accounting for the multiplying effect of loans. Swiss stocks will also be in the spotlight after the Swiss government warned on Thursday that the appreciation of the country's currency meant economic growth would be weaker than previously expected but said it was still too difficult to assess how severe the slowdown would be. In Germany, data showed on Thursday industrial orders surged far more than forecast in December, recovering from a sharp fall the previous month and hitting their highest level since April 2008. Bookings for goods made in Europe's largest economy climbed by 4.2 percent, beating the Reuters consensus forecast for a 1.5 percent gain and overshooting even the highest estimate for a 3.0 percent increase. ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0740 GMT: LAST PCT CHG NET CHG S&P 500 2,041.51 -0.42 % -8.52 NIKKEI 17504.62 -0.98 % -174.12 MSCI ASIA EX-JP 481.12 -0.12 % -0.58 EUR/USD 1.135 0.05 % 0.0006 USD/JPY 117.19 -0.06 % -0.0700 10-YR US TSY YLD 1.727 -- -0.07 10-YR BUND YLD 0.326 -- -0.04 SPOT GOLD $1,271.00 0.11 % $1.35 US CRUDE $47.89 -1.16 % -0.56 > GLOBAL MARKETS-EURO HIT AS ECB TAKES HARD LINE ON GREEK DEBT > US STOCKS-WALL ST ENDS LOWER WITH OIL PRICES, RENEWED GREECE WORRIES > TOKYO'S NIKKEI SHARE AVERAGE CLOSES DOWN 0.98 PCT > TREASURIES-U.S. BONDS STAGE LATE BOUNCE AS ECB SHUNS GREEK BONDS > EURO STEADIER AFTER FALLING ON RENEWED GREECE WORRIES > GOLD EXTENDS GAINS ON GREECE UNCERTAINTY, U.S. DATA EYED > COPPER SLIPS AS TRADERS TAKE PROFITS ON CHINA BANK RESERVE MOVE > OIL MARKETS DROP FURTHER AFTER CRASHING ON INVENTORY CONCERNS COMPANY NEWS: BNP PARIBAS France's largest bank said on Thursday that rising taxes and new regulations would impact earnings next year by 500 million euros and said it would increase cost cuts to cover growing compliance and control expenses. SANOFI Sanofi said on Thursday it would be in a position to name a new chief executive by the end of the first quarter as it delivered fourth-quarter earnings boosted by the weak euro. UBS U.S. federal prosecutors have launched a new probe into whether Swiss bank UBS AG helped Americans evade taxes through investments banned in the United States, the Wall Street Journal reported, citing people familiar with the investigation. MUNICH RE The German reinsurer raised its dividend for 2014 by more than expected to 7.75 euros per share from 7.25 euros, after posting full year net profit in line with expectations in a difficult reinsurance market. BT BT said on Thursday it had agreed to buy mobile operator EE for 12.5 billion pounds ($19 billion), and would raise 1 billion pounds through a placing of new shares to fund the deal. ABB Swiss engineer ABB reported a smaller-than-expected rise in quarterly profit, blaming an appreciation of the U.S. dollar and warning that the negative currency effect was likely to continue this year. TOTAL Europe's second-biggest oil company is preparing for the sale or listing of its rubber and insulation unit Hutchinson that could be worth up to 4 billion euros, sources told Reuters. SWISSCOM The telecoms group said its operating profit would decline this year, hit by the strong Swiss franc, higher pension costs and lower gains on the sale of real estate. DEUTSCHE TELEKOM, BT, ORANGE BT has agreed terms with Orange and Deutsche Telekom for the purchase of their EE mobile operator and a deal could be announced as early as Thursday morning, a person familiar with the situation said. NOKIAN RENKAAT Finnish winter tyre specialist Nokian Renkaat reported its fourth-quarter profits fell less than expected and proposed an annual dividend above the market consensus. VOLVO Global truck maker Volvo reported a surprise slight decline in fourth quarter core earnings but raised its outlook for truck markets in both Europe and North America and said it would cut more staff in its construction equipment arm. SWATCH GROUP Swiss watchmaker said on Thursday it was in a "strong position" despite an overvalued Swiss franc and a fall in its net profit last year. SBM The Dutch marine oil production and loading vessels specialist said its revenue this year could fall to as low as $2.2 billion, down from $3.5 billion in 2014. TELECOM ITALIA The Italian phone company investor Findim said on Wednesday it had cut its stake in the group to 1.989 percent of the voting capital. VINCI Vinci expects its 2015 revenue will decline slightly as a tough economic climate hurts its French contracting business and a toll road freeze weighs on its motorway concessions business. VODAFONE A steady recovery in Europe helped Vodafone to stem the rate of sales decline in its third quarter, putting the world's second biggest mobile operator in touching distance of overall revenue growth once again. TESCO Britain's grocery industry watchdog said on Thursday it had launched an investigation into supermarket Tesco's supplier practices with have resulted in delayed payments. ASTRAZENECA AstraZeneca said on Thursday it had agreed to buy Actavis' branded respiratory drug business in the United States and Canada for an initial payment of $600 million as it seeks external deals to ensure growth. The announcement came as Britain's second-biggest drugmaker posted fourth-quarter results that fell short of expectations. COMPASS GROUP Compass Group, the world's biggest catering firm, maintained its full-year outlook after seeing a return to growth in Europe and Japan, but warned that lower oil prices may impact its oil extraction-related business. SMITH & NEPHEW British artificial hip and knee maker Smith & Nephew posted a 7 percent rise in trading profit in the fourth quarter, and said it was confident it would grow both revenue and its trading profit margin in 2015. BANCA GENERALI The Italian asset manager said on Wednesday its total net inflows in January rose 80 percent on the year to 406 million euros, its best ever start to a year. COOPERATIVE BANKS The association of Italy's cooperative banks, which the government is set to reform, said that its advisers had suggested introducing a voting system that could favour smaller investors if the current reform plan went ahead. (Reporting by Blaise Robinson; Editing by Alistair Smout)
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