European stock markets will look to earnings from the financial sector this week for reassurance that recent dividend cuts will not become the norm, while a possible European Central Bank rate cut could boost sentiment.
Investors will also track geopolitical developments as fears of a possible war in Iraq continue to cast a pall over markets, while results from French utility Suez will come under scrutiny amid lingering cash crunch concerns.
"There are two main themes next week," said Rolf Elgeti, head of European equities strategy at Commerzbank over the weekend. "One is the ECB meeting and the other is what will happen to insurers, whether they will maintain their dividends."
The financial sector will be in the spotlight after Britain's Prudential abandoned its commitment to steadily increase its dividend last week and after Credit Suisse slashed its pay-out by 95 per cent.
Investors will look for threats to other dividends in full-year results from banking giant HSBC today and UK life insurer Britannic tomorrow, with figures also due from Friends Provident on Wednesday and from Dutch insurance giant Aegon on Thursday.
Meanwhile, full-year earnings from French utilities giant Suez will be scrutinised on Thursday amid worries its results could spring some nasty surprises.
Suez warned last month it would report a 2002 net loss of about 900 million euros, but pleased investors with plans to cut its debt by a third.
Elgeti said the relatively defensive utilities sector could nonetheless attract some buyers, with France's Vivendi Environnement set to report tomorrow followed by Germany's E.ON on Wednesday - especially if insurers are again hit by dividend concerns.
"That may be a sign for investors to get out of insurance and go into utilities," he said.
The fate of semiconductor stocks such as ASML, STMicroelectronics, Philips and Infineon will depend on US leader Intel, which is due to deliver a mid-quarter trading update after European markets close on Thursday.
"If Intel comes out and says demand is dreadful then tech stocks could take a nose-dive," said David Thwaites, European strategist at BNP Paribas.
Meanwhile, the telecoms sector could also come under spotlight with full-year results from KPN due today and France Telecom reporting on Wednesday.
The media sector will also feature earnings from French advertiser Havas on Wednesday and Franco-American giant Vivendi Universal on Thursday.
Pearson, British publishers of the Financial Times newspaper, reports its 2002 results today.
Recent comments by ECB President Wim Duisenberg a week ago that the European economy would grow too slowly this year were taken as a sign he is ready to cut benchmark rates by at least a quarter percentage point to 2.5 per cent on Thursday.
Analysts said a cut would boost banking and cyclical stocks as well as lift business sentiment.
"I think the next move will be 50 basis points - it is question of whether they do it this month or next month," said Rupert Thompson, global equity strategist at brokerage E*Trade.
Purchasing Managers' Index data for the eurozone today could provide further clues to the ECB's rate decision, while the closely watched US Institute of Supply Management's latest manufacturing index will give investors some steer on the state of business sentiment in the world's biggest economy.
After poor US and European consumer confidence data last week, attention on Wednesday will turn to results from retailers Carrefour, Pinault Printemps Redoute and on Thursday to luxury goods maker LVMH for signs spending is holding up.
The markets will also scrutinise US non-farm payroll data on Friday and Germany's February unemployment figures on Thursday for more concrete signs on the outlook for spending.
"Ultimately what is most important for spending is employment - if people have got a job they are going to keep spending," said Mr Thwaites.