UK Market News

Tuesday May 5, 07:53 AM
European Factors-Shares seen tracking Wall St rally

PARIS, May 5 (Reuters) - European shares were set to gain ground on Tuesday, mirroring a strong rally on Wall Street spurred by positive signs on U.S. home sales and by rising hopes that U.S. banks' fresh capital needs will be manageable. At 0623 GMT, futures for the DJ Euro Stoxx, for Germany's DAX (Xetra: news) and for France's CAC were up between 0.2 percent and 0.5 percent, while financial spreadbetters expected the UK's blue chip index to open 74-76 points higher, or as much as 1.8 percent, after being closed on Monday for a public holiday. 'The bulls are back in town and in short-term view it is hard to believe that they can be stopped easily,' German brokerage Close Brothers Seydler wrote in a note. Europe's benchmark FTSEurofirst 300 added 1.6 percent on Monday, hitting its highest close since January 12. The index is up nearly 31 percent since reaching a multiyear low in early March. But gains could be limited ahead of results of the U.S. government's 'stress tests' on banks. U.S. regulators have been poring over the holdings of the 19 largest U.S. banks to determine if they have enough capital to withstand further shocks. Banks were expected to be briefed on Tuesday on the final results, which will be published on Thursday. A source familiar with official talks told Reuters about 10 would be told they needed to increase the size of their capital cushions. In Europe, Swiss bank UBS (Virt-X: UBSN.VX - news) confirmed on Tuesday it had posted a net loss of 2 billion Swiss francs ($1.76 billion) on the back of yet more writedowns on illiquid assets. ----------------------MARKET SNAPSHOT AT 0628 GMT---------------------- LAST PCT CHG NET CHG S&P 500 907.24 3.39 % 29.72 MSCI ASIA EX-JP 355.30 0.34 % 1.19 EUR/USD 1.3355 -0.40 % -0.0054 USD/JPY 98.91 0.01 % 0.0100 10-YR US TSY YLD 3.176 -- 0.02 10-YR BUND YLD 3.243 -- -0.01 SPOT GOLD $902.90 0.06 % $0.55 US CRUDE $54.00 -0.86 % -0.47 ----------------------------------------------------------------------- * TOPWRAP-Investors eye stress tests amid hopes slump easing * Wall St rallies on banks; S&P positive for '09 * GLOBAL MARKETS-Bank caution supports dollar, tempers stocks * TREASURIES-Fed buying buffers bonds from stock rally * Aussie, others retreat from highs as caution sets in * Oil retreats towards $54 after 2009-high settlement * Copper up 3 pct, US homes data supports * Gold extends gains above $900 on dollar COMPANY NEWS: UBS Swiss bank UBS confirmed on Tuesday it had posted a net loss of 2 billion Swiss francs ($1.76 billion) on the back of yet more writedowns on illiquid assets and said it remained cautious. UBS said losses were driven by writedowns on risk positions, in particular 1.9 billion francs on monolines, and by losses at its investment bank. For details, see: SWISS LIFE (Virt-X: SLHN.VX - news) Insurer Swiss Life said Chief Financial Officer Thomas Mueller would leave the group at the end of June for personal reasons after the group posted a better-than-expected first-quarter gross written premium. For details, see: ALSTOM Engineering (Milan: ENG.MI - news) group Alstom (Paris: FR0010220475 - news) reiterated a target of an operating margin around 9 percent in the year to March 31, 2010, after posting increased sales and profitability for 2008/09. For details, see: ALCATEL (Paris: FR0000130007 - news) -LUCENT French telecoms equipment maker Alcatel-Lucent swung to a bigger-than-expected first-quarter adjusted operating loss but stuck to its target for around breakeven this year. For details, see: METRO Metro (Xetra: 725750 - news) , the world's fourth largest retailer, reported a worse than expected 49.3 percent slump in first-quarter underlying operating profit on Tuesday as currency devaluations in Eastern Europe weighed. For details, see: HEIDELBERG Heidelberg, the world's largest printing press maker, reported a worse than expected fourth-quarter operating loss after booking virtually all of its remaining restructuring charges. For details, see: FIAT (Milan: F.MI - news) Fiat plans to keep all German Opel plants open should its takeover plans for the General Motors (NYSE: GM - news) unit succeed but would cut staff there, Fiat Chief Executive Sergio Marchionne told a newspaper. For details, see: TELENOR Telecom group Telenor (Oslo: TEL.OL - news) repeated flat 2009 organic revenue target, as well as 2009 EBITDA margin target and 2009 capex. For details, see: M6 M6, France's second-largest commercial TV broadcaster, expects operating profit to fall again this year, with no quick recovery in sight for depressed advertising markets, Executive Chairman Nicolas de Tavernost told Reuters in an interview. For details, see: (Reporting by Blaise Robinson. Additional reporting by Christoph Steitz in Frankfurt) Keywords: MARKETS EUROPE FACTORS