Growth expectations help European shares, cyclicals up
* FTSEurofirst 300 index rises 0.3 percent
* Cyclicals rally on Japan's monetary policy easing
* Euro STOXX 50 index faces stiff resistance at 2,600
By Atul Prakash
LONDON, Sept 19 (Reuters) - European shares rebounded on Wednesday, getting closer to recent 14-month highs as the Bank of Japan's move to ease monetary policy in the world's third-biggest economy allayed concerns about global growth.
Sectors linked to economic growth such as autos, miners, banks and construction were the best performers after Japan followed recent central bank stimulus actions in the United States and Europe and boosted its asset purchase programme to support the economy that faces weakening exports.
"There have been some concerns with regards to China's economic growth and its broader impact elsewhere. The fact that the Japanese central bank is attempting to play its part is certainly favourable," Keith Bowman, equity analyst at Hargreaves Lansdown, said.
"Investors are trying to remain generally defensively oriented, but at the same time they are trying to give themselves some exposure to the more cyclical areas, in case we do see a more sustained economic recovery."
European basic resources index, generally seen as cyclical play, was the top gainer, with the sector index rising 1.2 percent. Autos climbed 1 percent, while European banks were up 0.6 percent.
At 0807 GMT, the FTSEurofirst 300 index was up 0.3 percent at 1,115.54 points after falling 0.4 percent on Tuesday and 0.3 percent on Monday. The index, which climbed to a 14-month high on Friday on the U.S. Federal Reserve's stimulus programme, is up more than 11 percent so far this year.
According to a Barclays survey of its about 425 clients, confidence has improved over the past quarter, with investors taking on more risk and European equities seen as a top pick into the year-end.
Risks in Europe were seen lower, with 78 percent of respondents expecting Spain to enter a full bailout programme by year-end, and a majority seeing more stimulus from the European Central Bank in the shape of rate cuts.
Charts, however, showed that European stocks would face strong resistance on their upward journey, with the euro zone's blue chip Euro STOXX 50 index witnessing a tough level at around 2,600 points, its recent low and where the last year's breakdown occurred. Support was seen at 2,400.
The index was up 0.4 percent at 2,564.32 points.
"The 2,600 level may be quite difficult to get through. The top of the range is probably at 3,000. If banks break out of their one-year ranges, then that would be the completion of base formations and be very encouraging for the market," Tim Parker, technical analyst at Westhouse Securities, said.
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