European shares up, investors look for dovish Draghi tone

LONDON, July 4 Thu Jul 4, 2013 3:15am EDT

LONDON, July 4 (Reuters) - European shares climbed higher early on Thursday, recovering most of the losses incurred over the previous two sessions, as recent underperformers such as autos and miners rebounded.

The FTSEurofirst 300 rose 10.45 points, or 0.9 percent, to 1,161.35, having fallen 1.1 percent since Tuesday, but political unrest in Egypt and European debt concerns surrounding Greece and Portugal were likely to cap upside momentum.

Volumes were expected to be thin too, with the U.S. market closed on Thursday for the Independence Day holiday and ahead of rate decisions and statements by the European Central Bank and the Bank of England later in the session.

Although no policy changes are expected from both the central banks, investors will be looking for dovish tones from the ECB president Mario Draghi to help calm markets after bond yields in peripheral euro zone countries rose.

"I am expecting some healing words from Draghi, which should calm fears over the situations in Portugal and Greece because it is a very psychologically driven market," Rolf Bland, chief investment officer at VZ Vermogenszentrum in Zurich, said.

"I don't think any new stimulus measures will be on the table, but it is a question of words and making clear once again that everything will be done (to save the euro) and interest rates and policy will remain accommodative, which will be very helpful at this moment," he said.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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