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Europe Factors to Watch-Stocks set to dip; EADS, BAE eyed

PARIS, Oct 1 (Reuters) - European stocks are set to open lower on Monday, adding to the previous session's losses on mounting concerns over Spain's economic crisis and as data signalled further evidence of slowing growth in China.

At 0634 GMT, futures for Euro STOXX 50

, for Germany's DAX and for France's CAC

were flat to down 0.4 percent.

Spain's Treasury Minister Cristobal Montoro said on Saturday the 2012 public deficit would reach 7.4 percent of gross domestic product, when transfers to aid its struggling banks are included, above the original deficit target of 6.3 percent of GDP for this year.

An independent report showed on Friday that Spanish banks will need a total of 59.3 billion euros ($76.3 billion) in extra capital to be able to face a serious economic downturn.

Fuelling worries over the pace of global growth, China's official manufacturing purchasing managers' index (PMI) showed factory activity contracted for a second month in September and a survey of Japan's big manufacturers showed sentiment worsening over the past three months.

The closely-watched China survey signalled that the world's second-biggest economy probably suffered a seventh straight quarter of slowing growth.

On Friday, European shares ended the quarter with a whimper as fund managers booked gains on stocks that drove a strong rally over the last three months, with the Euro STOXX 50

losing 2.1 percent on the session, while managing to post its best quarterly performance in three years.

"We've turned to 'reduce' from 'neutral' on the Euro STOXX 50," Aurel BGC chartist Gerard Sagnier said.

"It broke a strong support at 2,490 points, and now the next target is 2,405 and 2,375. The market is poised to retrace at least half of the gains made between July 25 and Sept 14."

Aerospace and defense firms EADS

and BAE , which are in merger talks, will be in the spotlight after key EADS shareholder Lagardere

said conditions attached to the planned tie-up were unsatisfactory and called on management to reexamine the project.

The banking sector will also be in focus after Credit Agricole

confirmed on Monday that it was in exclusive talks to sell the whole of its Greek Emporiki unit to Alpha Bank

. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0633 GMT LAST PCT CHG NET CHG S&P 500 1,440.67 -0.45 % -6.48 NIKKEI 8,796.51 -0.83 % -73.65 MSCI ASIA EX-JP 517.70 -0.25 % -1.30 EUR/USD 1.2843 -0.09 % -0.0011 USD/JPY 77.83 -0.09 % -0.0700 10-YR US TSY YLD 1.622 -- -0.01 10-YR BUND YLD 1.448 -- 0.03 SPOT GOLD $1,766.19 -0.25 % -$4.50 US CRUDE $91.52 -0.73 % -0.67

> GLOBAL MARKETS-Euro, oil fall on Spain, growth worries

> Wall St marks best third quarter since 2010

> Nikkei falls to near 3-week low on global growth worries

> TREASURIES-US 10-year notes edge higher as equities falter

> FOREX-Euro slips to three-week low as Spain fears persist

> PRECIOUS-Gold drifts lower as Spain worries weigh on euro

> Copper slips on global growth worries; China PMI weighs

> Brent crude slips below $112 as global worries weigh

COMPANY NEWS: EADS , BAE , LAGARDERE

Key French EADS shareholder Lagardere said on Monday the conditions attached to a planned merger of the European aerospace group with Britain's BAE Systems were unsatisfactory and called on management to reexamine the project.

CREDIT AGRICOLE

Credit Agricole confirmed on Monday that it was in exclusive talks to sell the whole of its Greek Emporiki unit to Alpha Bank

as the French bank seeks to pull out of the debt-stricken country. SPANISH BANKS

Spanish banks will need a total of 59.3 billion euros ($76.3 billion) in extra capital to ride out a serious economic downturn, an independent report said on Friday, removing a major obstacle in the way of an international bailout for Madrid.

POPULAR

The board of Spain's Banco Popular

has approved a capital hike of up to 2.5 billion euros ($3.2 billion), a source close to the process said on Sunday, after an audit showed the bank had capital needs up to 3.2 billion euros.

SANTANDER

The Mexican arm of Spain's Banco Santander

said on Friday that the underwriters of its dual-country offering, launched earlier this week, have exercised their greenshoe.

TELEFONICA Telefonica

will kick off the planned listing of part of its German mobile phone business next week with a pitch to investors based on the strength of the local market and a dividend, three people familiar with the matter said on Friday.

COMMERZBANK

Commerzbank on Saturday declined to comment on a magazine report that it planned to pay no dividend for its 2013 financial year.

SIEMENS

Siemens has emerged as favourite to buy Finmeccanica

unit

AnsaldoEnergia, two people close to the situation said, as the Italian company continues to streamline its operations.

RWE , E.ON

U.S. energy transmission developer Anbaric is mulling taking a stake in German power grid operator TenneT

and wants to invest around $4 billion, a Wirtschaftswoche reported. SAP

The U.S. Department of Justice and the UK office of Fair Trading approved SAP's takeover of Ariba Inc.

on Friday, allowing SAP to open a new front in its battle with Oracle for the internet-based cloud computing market. TRANSOCEAN

A Brazilian court overturned an injunction to suspend off-shore drilling by rig operator Transocean , accepting that it could have caused billions of dollars in lost revenue for the government and the state-led oil firm Petrobras

. TELECOM ITALIA

Chairman Franco Bernabe denied on Saturday media reports about a possible creation of a holding for the reorganisation of the group, according to La Repubblica on Sunday.

(Reporting by Blaise Robinson)

((blaise.robinson@thomsonreuters.com)(+33.1.4949.5269)(Reuters Messaging: blaise.robinson.thomsonreuters.com@reuters.net))

Keywords: MARKETS EUROPE FACTORS

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