STOCKS NEWS EUROPE-SG sees upside from Hollande's presser

Strategists at Societe Generale (Paris: FR0000130809 - news) see upside from French President Francois Hollande's plans to revive the weak economy, set to be unveiled at a press conference in Paris at 1530 GMT on Tuesday.

Hollande plans to use the event to detail a proposed "responsibility pact" with business in which firms will be offered tax cuts and less red tape in return for hiring commitments aimed at reducing 12 percent unemployment.

So far this year, France's blue-chip stock index CAC 40 - home of bellwethers such as Sanofi (NasdaqGM: GCVRZ - news) , L'Oreal and Total (Brussels: FP.BR - news) - is down 0.8 percent, the worst performance among European bourses in 2014 and a sharp contrast with euro zone peripheral markets, with Spain's IBEX up 4.4 percent, Italy's FTSE MIB up 3.8 percent, Portugal's PSI 20 up 8.9 percent and Greece's ATG up 11 percent.

Societe Generale strategists expect Hollande to detail a major policy shift that he already flagged in his New Year's Eve (Shenzhen: 300014.SZ - news) address to the nation, and that French equities should benefit from it.

"With President Hollande's popularity at record lows in the polls and the current status quo looking increasingly unsustainable," says Alain Bokobza, Societe Generale's head of global asset allocation strategy.

"We think the French President is on the eve of implementing a policy shift as radical as that made in 2003 by German Chancellor Schroeder with his 'Agenda 2010' and French President Mitterrand's game changer in March 1983. From a market perspective, an acceleration of spending cuts to reduce corporate taxes should be welcomed by the equity market and keep the CAC 40 on track to reach our forecast of 5,100 by year-end," Bokobza writes in a note.

Europe indexes in 2014: http://link.reuters.com/pad95v

Reuters Messaging: blaise.robinson.thomsonreuters.com@reuters.net