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European Factors to Watch-Shares seen down, focus on Spain

Tuesday, 2 Oct 2012 | 1:42 AM ET

(Adds detail, quotes, company news; updates snapshot table)

LONDON, Oct 2 (Reuters) - European shares were set to retreat in early trading on Tuesday after strong gains in the previous session, with uncertainty over the timing of a likely aid request by Spain seen prompting investors to cut their exposure to riskier assets.

European officials told Reuters late on Monday that Spain was ready to request a bailout for its public finances as early as next weekend, but Germany had signalled that it should hold off.

"The longer the uncertainty lasts, the more pressure comes back to equity markets," Christian Stocker, equity strategist at UniCredit in Munich, said.

Investors were also likely to be wary of comments by Federal Reserve Chairman Ben Bernanke defending the U.S. central bank's ultra-loose monetary policy, with some analysts saying that the market was getting anxious about the Fed's eventual exit plan.

U.S. stocks rose on Monday as the Institute for Supply Management's (ISM) data showed a surprising expansion in U.S. manufacturing in September. Shares, however, pared gains after Bernanke's comments.

"The ISM development is good news for stabilising growth expectations in the U.S. and we continue to expect the economy will grow faster in the second half. But many investors now fear that the Fed stimuli could be reduced somewhat due to the gradual better indications for growth," Stocker said.

"That's nothing really market-shaping, but with the market being a bit fragile from a technical point of view, it leads to profit taking and a more cautious stance."

Futures for the Euro STOXX 50 , Germany's DAX and France's CAC were

0.7 to 0.8 percent lower. Financial spread betters earlier predicted Britain's FTSE 100

to fall as much as 0.7 percent.

The FTSEurofirst 300 index

of top European shares closed 1.4 percent higher at 1,104.71 on Monday, marking the index's strongest one-day gain since a 2.4 percent rise on Sept. 6.

Banks

, which surged 2.2 percent on Monday, will be in focus as an EU advisory group will on Tuesday recommend reforms that could include splitting banks' retail business from their investment operations to protect savers and host nations.

MARKET SNAPSHOT AT 0634 GMT LAST PCT CHG NET CHG S&P 500 1,444.49 0.27 % 3.82 NIKKEI 8,786.05 -0.12 % -10.46 MSCI ASIA EX-JP 0.25 % 1.30 EUR/USD 1.2905 0.13 % 0.0017 USD/JPY 78.04 0.09 % 0.0700 10-YR US TSY YLD 1.618 -- 0.00 10-YR BUND YLD 1.450 -- -0.03 SPOT GOLD $1,777.29 0.2 % $3.50 US CRUDE $92.45 -0.03 % -0.03

* Shares, euro, Aussie rise as US factory data soothes

* Strong U.S. data helps Nikkei edge away from 3-week low

* Wall St kicks off October with modest gains

* Euro edges higher, but outlook clouded by Spain

* Copper eases after 3 days of gains, U.S. data cushions

* Gold inches up on weaker dollar; central banks eyed

* Brent holds near $112, growth woes keep sentiment shaky

* Bond prices up as stocks fade, data selloff subsides

COMPANY NEWS FRANCE TELECOM

The telecom operator could announce a cut to its 2013 dividend when it reports third-quarter results on Oct. 25, French daily Le Figaro reported on Tuesday. The newspaper said Chief Executive Stephane Richard is undertaking a road show in the U.S. to prepare investors.

SANOFI

The drugmaker's experimental pill to treat Gaucher disease, a rare inherited condition, has met its main goal in a late-stage trial, the French drugmaker said on Tuesday.

TECHNIP

The oil services company said on Tuesday it has signed a lump-sum contract with Murphy Exploration & Production Company for the development of an offshore field in the Gulf of Mexico.

UBS :

UBS on Monday lost a bid to suspend a federal regulator's lawsuit accusing it of misleading Fannie Mae

and Freddie Mac into buying billions of dollars of risky mortgage debt. Fore more, click on RICHEMONT

Richemont said it has fully acquired VVSA, a Swiss high-end manufacture of stamped exterior components for watches, gold refiner and producer of semi-finished precious metal products destined for the watch and jewellery industry.

LONZA :

Lonza and U.S. biopharma company Celladon Corp announced an agreement, according to which Lonza will manufacture cGMP-grade MYDICAR enzymes for use in future clinical trials.

TRANSOCEAN :

A Brazilian court overturned a ban on operations by offshore drilling contractor Transocean Ltd, accepting government arguments that the ban could cause billions of dollars in lost taxes for the government and output for the state-led oil firm Petrobras

. For more, click on BMW , VOLKSWAGEN , DAIMLER

Germany may subsidize electric cars after the next general election in order to meet a lofty goal of 1 million fossil fuel-free vehicles on the road by 2020, according to Chancellor Angela Merkel.

DEUTSCHE BOERSE

The German stock market group expects up to 10 more corporate bond issues before the end of the year as clients seek alternatives to raising capital via a listing.

EADS , BAE SYSTEMS

The bosses of the aerospace group and BAE Systems sought to reassure investors over the benefits of their planned $45 billion merger amid what they described as "myths and misconceptions" over the creation of a pan-European defense giant.

LVMH, HERMES

The head of the French financial markets watchdog AMF, Gerard Rameix, told BFM Business that the AMF's sanctions committee would examine Hermes' 2010 complaint against LVMH in the "first few months of 2013" to decide whether to impose sanctions, according to several reports in the French press.

CHEUVREUX

French brokerage Cheuvreux is likely to cut hundreds of jobs as part of Credit Agricole's

sale of the unit to rival Kepler, according to two sources familiar with the matter, the latest in a wave of job cuts to hit equity trading firms.

FIAT

New car sales in recessionary Italy plunged 25.7 percent in September from the same month a year ago to 109,178 vehicles, Italy's Transport Ministry said on Monday.

ALSTOM Alstom

has successfully raised 350 million euros ($451.68 million) to finance an investment in a Russian rail equipment firm a s well as future acquisitions, the French transport and power engineering company said on Monday.

BNP PARIBAS , SOCIETE GENERALE

An EU advisory group will on Tuesday recommend reforms that could include splitting banks' retail business from their investment operations to protect savers and host nations from the kind of risk-taking that triggered the financial crisis.

(Reporting by Atul Prakash; Editing by John Stonestreet and Sudip Kar-Gupta)

((atul.prakash@thomsonreuters.com)(+44 20 7542 6189)(Reuters Messaging: atul.prakash.thomsonreuters.com@reuters.net))

Keywords: MARKETS EUROPE FACTORS/