Miners push European shares higher on solid Alcoa earnings
* FTSEurofirst 300 up 0.4 percent
* Mining stocks boosted after Alcoa kicks off U.S. season robustly
* EDF jumps in brisk volume on French tariff hikes
By Tricia Wright
LONDON, July 9 (Reuters) - A rally in mining stocks led gains in European shares on Tuesday as investors bought back into the beaten-down sector after solid earnings from U.S. aluminium producer Alcoa.
The FTSEurofirst 300 was up 0.4 percent at 1,184.44 by 1114 GMT, building on Monday's 1.4 percent advance and also supported by an improving outlook for the U.S. economy.
Basic resources were the biggest risers by some margin, up 1.9 percent, after Alcoa kicked off the U.S. earnings season by unveiling a larger-than-expected adjusted second-quarter profit and forecasting higher aluminium demand.
This helped shave a drop this year in the sector - fuelled by concern over demand from top metals consumer China - to some 26 percent, against a 4.5 percent rise on the FTSEurofirst 300.
"With the resources sector having been under so much pressure... anything which placates a few nerves on that front will be extremely welcome," Ian Richards, head of equity strategy at Exane BNP Paribas, said.
"Maybe the corporate newsflow does give people a little bit of confidence to try bottom-fishing at these levels."
The sector trades on a 12-month forward price/earnings ratio of 9.41 times, compared with its 10-year average of 10.51 times, according to Thomson Reuters Datastream.
EDF led gainers in Europe, up 8 percent, after the French government allowed a 5-percent rise in electricity tariffs in August and 5 percent more in August next year. Trading volume in the share was robust, at nearly twice its 90-day daily average, against the FTSEurofirst 300 on 35 percent.
European shares have just suffered their first quarterly loss in a year, hurt by the Fed's plan to start trimming its monetary stimulus programme, which has sparked a sell-off in both fixed income and equity markets worldwide.
But a strong U.S. jobs report on Friday helped ease concerns over whether the world's biggest economy could withstand reduced stimulus.
Technical analysts were bullish on the prospects for the Euro STOXX 50, up 0.4 percent at 2,660.09, which with Monday's 2.1 percent advance has broken decisively back above its 200-day moving average, currently at 2,635.
"The rally in the STOXX 50E looks like it might have further to go in the near term as traders make the assumption that U.S. growth will outweigh the effects of the withdrawal of monetary stimulus," Bill McNamara, analyst at Charles Stanley, said.
But the index might find resistance at 2,672 at its 50-day moving average around 2,715.
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