Europe Factors-Equity rally set to lose steam ahead of ECB

 (Recasts with futures, adds details, company news; updates snapshot table)
 PARIS, April 5 (Reuters) - European equities were seen flat on Tuesday, as
the market's three-week rally runs out of steam while buoyant oil prices fuel
inflation concerns ahead of the European Central Bank's interest rate decision.
 Moody's downgrade of Portugal's bond ratings to 'Baa1' from 'A3' on Tuesday
also brought the euro zone debt crisis back at the forefront of investors'
minds.
 By 0625 GMT, futures for Euro STOXX 50 (STXEc1: Quote, Profile, Research) were down 0.1 percent, for
Germany's DAX (FDXc1: Quote, Profile, Research) were down 0.05 percent and for France's CAC (FCEc1: Quote, Profile, Research) were
flat.
 Meeting on Thursday, the ECB is expected to raise rates by 25 basis points
from a record low in reaction to rising inflationary pressures in the euro zone.
Two more 25-basis-point rate hikes are factored in by year-end. (ECBWATCH: Quote, Profile, Research)
 Late on Monday, Federal Reserve Chairman Ben Bernanke said a recent rise in
U.S. inflation was driven primarily by rising commodity prices globally, and is
unlikely to persist.
 Bernanke's comments were in sharp contrast to recent comments made by a
string of U.S. central bank officials, some of whom have argued the time was
coming for the Fed to begin tightening monetary policy. [ID:nLDE73400S]
 Investors awaited the release of the Federal Open Market Committee's minutes
from its meeting of March 15, due at 1800 GMT on Tuesday, to get more insight on
the outlook for U.S. interest rates.
 Earlier on Tuesday, Australia's central bank kept interest rates steady for
a fifth month, saying a lofty Australian dollar, moderate wages growth and
intense retail competition would help keep inflation at bay for the year ahead.
[ID:nL3E7F40J2]
 
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 Graphic on global rates: http://link.reuters.com/vug88r
 Interactive graphic on M&A: http://r.reuters.com/kyb46q
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 
 U.S. stocks ended mostly flat on Monday in low volumes, with the S&P 500
(.SPX: Quote, Profile, Research) running into strong resistance around its February peak.
 Europe's FTSEurofirst 300 (.FTEU3: Quote, Profile, Research) index eked out a small gain, helped by a
spat of M&A deal, but the volume on the FTSEurofirst 300 represented only 84
percent of the index's 90-day average daily volume.
 Tech shares will be on spotlight after U.S. bellwether Texas Instruments
(TXN.N: Quote, Profile, Research) launched a takeover bid for rival National Semiconductor Corp (NSM.N: Quote, Profile, Research)
for $6.5 billion, offering a rich 78 percent premium. [ID:nN04281619]
 "(The recent deals) suggest corporates are now seeing good opportunities to
put their vast cash resources to work as they see superior longer-term values
than currently reflected in equity markets," IG Markets strategist Ben Potter
wrote in a note.
 
 ----------------------MARKET SNAPSHOT AT  0623 GMT------------------ 
                                      LAST        PCT CHG    NET CHG 
 S&P 500                  (.SPX: Quote, Profile, Research)  1,332.87         0.03 %       0.46 
 NIKKEI                  (.N225: Quote, Profile, Research)  9,615.55        -1.06 %    -103.34 
 MSCI ASIA EX-JP (.MIASJ0000PUS: Quote, Profile, Research)    582.72        -0.02 %      -0.10 
 EUR/USD                  (EUR=: Quote, Profile, Research)    1.4185        -0.23 %    -0.0032 
 USD/JPY                  (JPY=: Quote, Profile, Research)     84.33         0.24 %     0.2000 
 10-YR US TSY YLD    (US10YT=RR: Quote, Profile, Research)     3.437             --       0.01 
 10-YR BUND YLD      (EU10YT=RR: Quote, Profile, Research)     3.378             --       0.00 
 SPOT GOLD                (XAU=: Quote, Profile, Research) $1,437.70         0.08 %      $1.15 
 US CRUDE                 (CLc1: Quote, Profile, Research)   $108.17        -0.28 %      -0.30 
 -------------------------------------------------------------------- 
 
 GLOBAL MRKTS-Euro edges off 5-mth high; Brent above $121 [ID:nL3E7F503L]
 S&P closes flat, fails to break through resistance       [ID:nN04140958]
 Nikkei falls as rebound stalls, TEPCO hits record low    [ID:nL3E7F5078]
 Crude dips from 2-1/2 year top; supply concerns persist  [ID:nL3E7F503Z]
 TREASURIES-View Fed will stay the course boosts bonds    [ID:nN04286087]
 Copper up, Bernanke cools inflation fears                [ID:nL3E7F509E]
 PRECIOUS-Silver hits 31-yr top, iShares Silver at record [ID:nL3E7F503K]
 
 COMPANY NEWS:
 
 GDF (GDF.PA: Quote, Profile, Research), EDF (EDF.PA: Quote, Profile, Research)
 The French government said on Tuesday that it would cancel a planned
increase in natural gas prices and would allow a 1.7 percent rise in electricity
prices starting in July. Further increases after July will allow for a total
rise of 2.9 percent in electricity costs through June 30, 2012, the government
said.
 
 ARCELORMITTAL (ISPA.AS: Quote, Profile, Research)
 European Union regulators cut 80 percent off a fine imposed on ArcelorMittal
for taking part in a steel cartel because subsidiaries of the Luxembourg-based
steelmaker could not pay their penalties. [ID:nLDE7331ZR]
 
 RWE (RWEG.DE: Quote, Profile, Research), E.ON (EONGn.DE: Quote, Profile, Research), ENBW (EBKG.DE: Quote, Profile, Research)
 A German deputy environment minister said the government would phase out all
nuclear power in the country before 2020, taking a hard-line stance that may not
be reflective of the centre-right coalition. [ID:nN04274847]
 
 BP (BP.L: Quote, Profile, Research)
 The oil major has submitted one application for a drilling permit since the
Obama administration lifted its deepwater-drilling ban, but it has reached no
deal with the government on resuming activity in the Gulf, a company source said
on Monday. [ID:nWNA5380]
 
 HMV GROUP PLC (HMV.L: Quote, Profile, Research)
 The company now expects profit before tax and exceptional items for the full
year to be around 30 million pounds. [HMV.L-E]
 
 CAPGEMINI (CAPP.PA: Quote, Profile, Research)
 Europe's largest computer consultancy is expected to announce on Tuesday the
acquisition of two French IT services companies, Artesys and Avantias, for 40
million euros ($56.89 million), Les Echos newspaper reported.
 
 MERCK KGAA (MRCG.DE: Quote, Profile, Research)
 The company aims to resume full production by June 1 in Japan at the world's
only factory making a specialty paint pigment that has forced Ford Motor Co
(F.N: Quote, Profile, Research) and other car makers to stop taking orders for cars in certain colours.
[ID:nL3E7F42MP]
 
 INTESA SANPAOLO (ISP.MI: Quote, Profile, Research)
 The bank has formed a consortium to manage the capital hike it could approve
on Tuesday, a source close to the matter said on Monday. [ID:nLDE7330BS]
 
 BANCA MONTE DEI PASCHI DI SIENA (BMPS.MI: Quote, Profile, Research)
 The bank's Tier 1 ratio was boosted by 40 basis points to 8.8 percent, based
on end-2010 data, after it took advantage of recent Italian legislation, it said
on Monday.
 
 A.P. MOLLER-MAERSK (MAERSKb.CO: Quote, Profile, Research), DANSKE BANK (DANSKE.CO: Quote, Profile, Research)
 Pressure from shareholders is mounting on the Danish oil and shipping group
to sell its 20 percent stake in Denmark's biggest financial institution, daily
Berlingske said. The group has reiterated it has no intention to sell the stake,
Berlingske said. For more on the companies, double click on [MAERSKb.CO]
 
 SKANSKA (SKAb.ST: Quote, Profile, Research)
 Skanska board member Stuart Graham will take over as chairman of the Nordic
region's biggest builder next year, Swedish daily Svenska Dagbladet reported on
Tuesday, quoting sources. Graham served as Skanska's chief executive from 2002
to 2008. For more on the company, double click on [SKAb.ST]
 
 (Reporting by Blaise Robinson)

Europe Factors-Equity rally set to lose steam ahead of ECB