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Oils, miners, techs give European shares a boost

Published 05/18/2011, 01:22 PM
Updated 05/18/2011, 01:28 PM

* FTSEurofirst 300 index closes up 0.4 percent

* Tech stocks get boost from Dell results

* Land Securities jumps after strong earnings

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Joanne Frearson

LONDON, May 18 (Reuters) - European shares ended higher on Wednesday, with gains in commodity stocks buoying up the index and technology firms lifted by strong results from U.S. computer maker Dell .

The session proved choppy, however, unsettled by worries over the euro zone's debt problems after the IMF warned Greece that it needed to accelerate reforms and euro zone officials dismissed suggestions of a modest debt restructuring for the country.

The pan-European FTSEurofirst 300 <.FTEU3> index of top shares closed up 0.4 percent at 1,130.89 points in limited volume that was just 79.8 percent of its 90-day average, while Greek shares fell to close at 1.4 percent.

The European market got an afternoon rally after Wall Street rose, following computer maker Dell's results, helping to improve sentiment for European technology stocks such as chip makers.

The STOXX Europe 600 Technology index <.SX8P> gained 0.8 percent, with chip maker ARM up 3.7 percent.

"The market is rising on Wall Street, but volumes are light," Richard Batty, Global Investment Strategist, Standard Life Investments, which has 157 billion pounds of assets under management.

Uncertainty remained over possible solutions to Greek debt problems. The main market worry is that any restructuring could have contagion effects beyond Greece's borders, and the size of the haircut needed to stabilise debt ratios would have to be sizeable and could hurt European banks holding Greek bonds.

Standard Life said "in the medium to longer term, we are underweight European equities", due to the euro zone peripheral debt concerns.

"Ongoing sovereign problems in the peripheral countries are not yet solved, the markets are worried of the inability of the peripheries to grow and solve their debt problems. A lot of unanswered questions will continue to keep equity markets volatile," Batty said.

The market also remained nervous about the Federal Reserve QE2 stimulus programme, which is expected to come to an end in June, and investors will eye the release of the Federal Open Market Committee minutes of its April 26-27 meeting at 2 p.m. (1800 GMT) for any clues.

"We're a bit cautious on developed equities. We don't expect either a strong decline or a big rebound, but we see a number of negative factors such as a string of weak data coming out of the U.S. economy while QE2 is coming to an end, and European stocks facing austerity measures and the debt crisis," said Joost van Leenders, strategist at BNP Paribas Investment Partners, which has 551 billion euros ($785 billion) in assets under management.

MINERS AND ENERGY STOCKS UP

On the upside, miners and oil and gas stocks supported the market in response to a rebound in metal and oil prices.

BG Group was up 3.1 percent, and BP up 1.4 percent.

The STOXX Europe 600 Basic Resources index <.SXPP> was up 0.7 percent, with Eurasian Natural Resources , Kazakhmys and Anglo American gaining 2.1 to 4.3 percent.

Looking at individual stocks, Land Securities jumped 6.4 percent after the landlord and developer posted a near 20 percent rise in full-year net asset value to become the top performer on the FTSE 100 index <.FTSE> up 1.1 percent. [ID:nLDE74H05W]

Deutsche Telekom was given a boost, up 1.7 percent after Bank of America Merrill Lynch upgraded its rating on the telecom to "buy" from "neutral".

The stock featured as top performer on the German DAX <.GDAXI>, which was up 0.7 percent. The French CAC index <.FCHI> gained 0.9 percent. (Additional reporting by Blaise Robinson; Editing by Will Waterman)

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