European shares looked set for a mixed opening on Wednesday as investors sift through a slew of earnings and assess the impact of strong oil prices. A slight rebound for the dollar will help underpin sentiment.
Geopolitical concerns mounted after U.S. Secretary of State Condoleezza Rice cited overnight what she called "firm evidence" that the Islamic Jihad militant group had helped to plan last week's Tel Aviv suicide bombing from Syria.
On the corporate newsfront, drugs giant Bayer, British insurer Prudential and miner Xstrata will likely be among early features as they report numbers, as does cement maker Holcim.
Steel makers will be under pressure after miner Rio Tinto said China's largest steel maker Baosteel had agreed to pay an increase of 71.5 percent over the 2004 contract price for its Hamersley iron ore.
And auto markers will likely remain under the spotlight as the Geneva car show continues amid gloomy prospects for European companies battling high metal prices and stiff competition.
*MARKETS
* Spread betters in London are calling the FTSE 100 , CAC , and DAX indexes between 6 points lower and 3 points higher.
* The FTSEurofirst 300 index of leading European shares gained 0.8 percent on Tuesday, closing at their highest level in two weeks after solid earnings from pharmaceutical heavyweight Sanofi-Aventis and a retreat of oil prices from four-month peaks.
* U.S. stocks rallied on Tuesday as a brokerage upgrade on the semiconductor sector and strength in pharmaceuticals helped the market rebound from a sell-off on Monday.
* U.S. Treasuries were steady in Asian trade, holding on to modest gains made in the previous session on a weaker-than-expected report on the U.S. manufacturing sector. Benchmark U.S. 10-year yields were trading at around 4.365 percent.
Comparable 10-year European government bonds yielded 3.735.
* Oil prices hovered under $52 a barrel, supported by strong demand and forecasts of low heating oil stocks in the face of freezing weather in the United States.
* The dollar climbed after data showing a surprisingly sharp slowdown in Australia's economy in the final quarter of 2004, but some investors said the market may have overreacted to the Australia growth figures.
* In Tokyo, the Nikkei average rose for the fifth day but overall market gains were capped as recent winners like steel makers and oil stocks came under profit-taking pressure.
* Investors locking in recent profits pushed other Asian indexes like the Kospi and the Hang Seng lower but the Straits Times was higher.
* Gold edged down in Asian trading, but fresh buying interest from investors and jewellers at lower levels helped the yellow metal stay above key support of $430 an ounce. (Reuters)