European shares boosted by U.S. data
* FTSEurofirst 300 up 0.2 percent
* Miners gain after robust U.S. data
* Telefonica drops after share placement
By Tricia Wright
LONDON, March 26 (Reuters) - European shares edged higher on Tuesday as the market focused on data showing continued gradual improvement in the U.S. economy, with the implications of a Cyprus bailout remaining unclear.
The FTSEurofirst 300 ended up 0.2 percent at 1,188.57, after a see-saw session which saw investors unsettled by concern that a rescue plan for Cyprus might turn out to be a template for other euro zone economies requiring bailouts.
Brightening the mood, data showed demand for long-lasting U.S. manufactured goods surged in February, suggesting factory activity continued to expand at a moderate pace, even though a gauge of planned business spending slipped.
Mining stocks, highly geared to the economic cycle, notched up solid gains on Tuesday, ahead 0.5 percent.
"Markets are struggling to find direction due to the confusing position taken by authorities in relation to Cyprus although they're continuing to react to positive data from the United States," Henk Potts, market strategist at Barclays, said.
"The corporate fundamentals remain very supportive indeed. Any signs of weakness should be used to gain exposure to an asset class that we think will continue to outperform in the medium to long term."
Shares in Greece, Italy and Spain remained under pressure as investors fretted about what might happen next in the euro zone's struggling states. The Euro STOXX 50 index fell 0.3 percent to 2,641.12.
Spanish telecom group Telefonica tumbled almost 5 percent, in trading volume at around 2-1/2 times the 90-day daily average, after a sale of all of its treasury stock - equivalent to 2 percent of its capital.
Espirito Santo said in a note that while the move should be seen in light of efforts to reduce debt and leverage, "it might also signal that following the stock's strong rally since the recent lows and the end of February, the company sees limited upside in the shares at least in the short term".
Charts painted a bearish picture. Fawad Razaqzada, analyst at GFT Markets, said the Euro STOXX 50 is looking "very fragile" in the aftermath of a 1.2 percent drop on Monday which pushed it below its 50-day moving average.
"All eyes are on that 2,600 level again - and if the buyers don't show up there then I wouldn't be surprised to see the index reach, and possibly break, 2,555 over the next few days or so," he said.
- Israel strikes house of Hamas Gaza leader, digs in for long fight |
- West agrees wider Russia sanctions as Kiev says forces near crash site |
- U.S. says Russia violated nuclear treaty, urges immediate talks
- Judge gives go-ahead for $2 billion sale of NBA's Clippers
- Jaded Argentines brace for looming debt default