* Euro STOXX 50 up 0.4 percent
* Telekom Austria up on Carlos Slim stake report
By Tricia Wright
LONDON, June 5 (Reuters) – European shares rose on Tuesday
after a choppy, nervous session as investors tentatively bought
into beaten-down shares on hopes for global central bank policy
action to revive the economic recovery.
The Euro STOXX 50 closed up 0.4 percent at
2,087.31, extending the previous session’s modest bounce off
Friday’s eight-month closing low in the aftermath of a dismal
U.S. jobs report. Volumes were curbed by a second day of UK
public holidays.
“If you look at equity markets in the past few days, indeed
there is some expectation that something is done by governments
… or (it is) the ECB which takes the initiative,” Luca Solca,
global head of European research at CA Cheuvreux, said.
The euro zone’s blue-chip Euro STOXX 50 index currently
trades at 8.4 times 12-month forward earnings, compared with
price-to-earnings ratios of 11.9 for Wall Street’s S&P; 500
and 9.3 for the MSCI Emerging equity index,
according to Thomson Reuters Datastream.
Investors were keenly awaiting a European Central Bank
meeting on Wednesday and a speech by U.S. Federal Reserve
Chairman Ben Bernanke on Thursday for any further policy
announcements.
Banks were among the best performing sectors on
Tuesday, ahead 0.8 percent, with investors heartened by the
prospect of possible fresh central bank stimulus.
Telekom Austria climbed 4.3 percent after Austrian
magazine News said that Mexican telecoms tycoon Carlos Slim now
holds 4.1 percent of the company and would pool his stake to
control almost a quarter of the company.
The Greek bourse underperformed sharply, skidding 5.1
percent as concerns intensified over the country’s future in the
euro zone, with all eyes on June 17 elections and whether it
will be able to form a government willing to stick to the
international bailout terms.
In an indication of the issues facing the euro zone, all the
region’s major economies are in decline, according to the latest
purchasing managers indexes, underlining why finance chiefs from
the G7 held emergency talks on the debt crisis.
They agreed to work together to address pressing problems in
Spain and Greece, Japan’s Finance Minister Jun Azumi said.
Charts showed the outlook for Euro STOXX 50 remains gloomy
after the index dipped below November’s troughs last week.
“The break confirms that the market holds its next target
below the 2011 low point. Accordingly we are still very much in
favor of selling temporary bounces such as the current one,”
strategists at SEB said in a note.
The technical picture also looked grim for the French CAC 40
index, where the 50-day moving average crossed below the
200-day moving average in early trading on Tuesday, a strongly
bearish technical signal called ‘death cross’, which usually
means further falls in the index six months down the road.
A similar ‘death cross’ was triggered on the euro zone’s
blue-chip Euro STOXX 50 last week, with the index
having extended its losses since then.
