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Europe Factors-Shares to end 7-day winning run on Fed caution

LONDON, Dec 15 (Reuters) - European shares are set to edge lower in early trade on Wednesday after gains in seven straight sessions, with the U.S. Federal Reserve's sober assessment of the economy seen prompting investors to trade cautiously. The Fed said at the conclusion of a one-day meeting on Tuesday that the economic recovery was continuing, though at a rate that has been insufficient to bring down unemployment. It reaffirmed its commitment to buy $600 billion in bonds. Futures for the EURO STOXX 50, for Germany's DAX and for France's CAC-40 futures were down 0.3 to 0.5 percent. Financial spreadbetters earlier expected Britain's FTSE 100 to open as much as 0.3 percent lower. Concerns about the euro zone debt situation also remained in the background, with rating agency Moody's Investors Service on Wednesday putting Spain's Aa1 sovereign credit rating on review for a possible downgrade, citing concerns over the country's mounting debt and its funding needs in 2011. Resource-related stocks will be in focus as key base metals prices fell 1 to 2 percent on technical selling and on concerns that demand for raw materials will continue to be sluggish in the United States. On Tuesday, the FTSEurofirst 300 index of top European shares closed 0.3 percent higher at 1,132.46 points in the longest winning run since June, supported by upbeat U.S. retail sales figures, though volume was low as the year-end holiday season approached. U.S. stocks cut gains to end mostly flat after a late-day sell-off on Tuesday. Japan's Nikkei average was almost unchanged on Wednesday. ----------------------MARKET SNAPSHOT AT 0738 GMT---------------------- LAST PCT CHG NET CHG S&P 500 1,241.59 0.09 % 1.13 NIKKEI 10,309.78 -0.07 % -6.99 MSCI ASIA EX-JP 553.70 -1.11 % -6.20 EUR/USD 1.3313 -0.51 % -0.0068 USD/JPY 83.85 0.25 % 0.2100 10-YR US TSY YLD 3.430 -- -0.04 10-YR BUND YLD 3.042 -- 0.01 SPOT GOLD $1,390.20 -0.39 % -$5.41 US CRUDE $87.69 -0.67 % -0.59 * Tokyo's Nikkei share average closes down 0.07 pct * US STOCKS-Markets close flat; Fed sparks late-day sell-off * TREASURIES-Yields hit high after firm retail sales * PRECIOUS-Gold moves little ahead of holidays, dollar weighs * METALS-LME copper eases after early flirt with record high * Oil prices ease after U.S. Fed dampens fast recovery hopes * Dollar rebounds after data gives US yields a boost COMPANY NEWS NOVARTIS The Swiss drugmaker has finally wrapped up its long-awaited buyout of U.S.-listed Alcon in a $12.9 billion deal after sweetening its original offer with a cash element. Novartis said a share buyback would be reactivated to minimise dilution to Novartis shareholders. INDITEX The world's biggest clothing retailer Inditex booked a 42 percent rise in nine-month net profit on Wednesday, buoyed by developing market growth and new store openings. RIO TINTO The miner said plans to spend more than $1 billion on two of its Canadian aluminium smelters, aiming to boost efficiency, cut costs and deliver on commitments made when it acquired Canada's Alcan. ROCHE, GLAXOSMITHKLINE Herceptin and Tykerb -- two rival breast cancer drugs from Roche and GlaxoSmithKline -- are not worth using in combination with aromatase inhibitors, Britain's health costs watchdog said on Wednesday. HOCHTIEF Hochtief urged its shareholders not to accept a low-ball takeover bid by Spain's ACS, in a move that may further sour relations after a three-month war of words. SIEMENS, ATOS France's Atos Origin will acquire Siemens' IT unit Solutions and Services (SIS) in an 850 million euro deal, the German conglomerate said late on Tuesday. LUFTHANSA, EADS, AIR FRANCE-KLM Airlines around the world could face sharp rises in the cost of buying aircraft if new export financing rules to be discussed by government officials in Paris are approved this week, the Financial Times said on Wednesday. Related news EADS Airbus rival Bombardier Inc rolled out its latest commercial jet on Tuesday and said it was well placed to win new business from airlines emerging from the downturn that need more efficient fleets to control costs. Related news AREVA Chief Executive Anne Lauvergeon told the French parliament's economic affairs committee that the nuclear reactor maker did not have any liquidity problems in the years to come and that the decision to carry out a capital increase rested with the government, which owns almost 90 percent of its capital. DASSAULT AVIATION The company plans to boost its cooperation with Chinese aerospace group Avic as it aims to win 40 percent of China's business jet market in the next two to three years, the head of Dassault Falcon told La Tribune. CARREFOUR Europe's largest retailer and its largest British peer Tesco are among four bidders for the Zabka retail chain, two sources told Reuters. PRYSMIAN, DRAKA Dutch cable manufacturer Draka and larger Italian peer Prysmian called for EGMs on Wednesday to discuss a takeover deal between them, with no mention of a higher offer by China's Xinmao Group. FIAT The carmaker will invest 3 billion reais ($1.77 billion) to open a car factory in Brazil's northeastern state of Pernambuco capable of producing 200,000 vehicles a year. (Reporting by Atul Prakash) Keywords: MARKETS EUROPE FACTORS (atul.prakash@reuters.com; +44 20 7542 6189; Reuters Messaging: atul.prakash.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved.

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