Ryanair powers European shares higher, set for strong weekly gains

Fri Mar 21, 2014 8:01am EDT

* FTSEurofirst 300 up 0.3 pct, Euro STOXX 50 up 0.4 pct

* Ryanair top gainer after well-received analyst day

* Euro STOXX 50 set for biggest weekly return since December

* Fund flows, polls point to further gains for equities (Updates prices, adds detail, quotes)

By Alistair Smout

LONDON, March 21 (Reuters) - European shares were set for strong weekly gains on Friday, demonstrating an ability to shrug off concerns over the Crimean crisis as strength in Ryanair and the mining sector helped growth sensitive sectors higher.

Irish airline Ryanair rose 3.7 percent, the top FTSEurofirst 300 riser, after a spate of upbeat broker comment following an update on its marketing overhaul and financing plans.

"There was a positive site visit to Ryanair, and with fares going up this summer and improved booking, and it's prompted the likes of Deutsche Bank to push them today," Zeg Choudhry, head of equities trading at Northland Capital, said.

The basic resources sector was up 1 percent, rebounding from near two-month lows, with miners boosted by speculation that China could support its economy through stimulus measures, traders said.

On Thursday the Chinese premier said that China would act to stabilise demand, with Chinese shares having their strongest gains in four months following news of looser finance restrictions for developers.

The surge in Ryanair and the miners helped push the FTSEurofirst 300 up 0.3 percent to 1,310.08 by 1117 GMT, leaving it set for a weekly gain of 2 percent, which would be its biggest such rise in over a month.

The euro zone EuroSTOXX 50 was up 0.4 percent on the day and is up 3.2 percent so far for the week, set for its strongest weekly gain since December.

The gains come despite ongoing uncertainty over Crimea, with European shares proving more resilient to volatility over the region than in previous weeks.

Russia has annexed Crimea from Ukraine, a move condemned by the West, but relief over a calm Crimean referendum and Moscow's assertion that no other Ukrainian region would be subject to intervention helped European stocks to move higher on Monday and Tuesday.

However, despite a renewed sell-off in Russian markets on Friday after the United States escalated its sanctions, European equity markets still managed decent gains.

"The longer this goes on, the more relaxed people are about it. There's generally been an avoidance of bloodspill, and it's been a relatively painless transition of Crimea from Ukraine to Russia," Alastair McCaig, analyst at IG, said.

"In contrast to this time last week, when we were nervous about what would happen over the weekend (in the referendum), there's a bit more of a relaxed mentality."

The FTSEurofirst 300 ended Thursday roughly steady, after encouraging U.S. data prompted a rally from the morning's lows.

Stocks were hit in early deals of the previous session after Federal Reserve Chair Janet Yellen had hinted that rate rises could begin as soon as Q2 2015, earlier than the market expected, and a quartet of Fed speakers due to speak later on Friday will be scrutinised for any further details.

Crimea-related turmoil has left the FTSE Eurofirst 300 over 3 percent off the year's closing high towards the end of February.

The FTSEurofirst 300 had gained nearly 20 percent since the start of 2013 to that February peak, however, and medium term prospects for European equity remained healthy, analysts said.

A Reuters poll on Thursday found that European stocks will extend their rally in 2014, fuelled by a long-awaited rebound in corporate profits as the region's recovery picks up and global investors shift from emerging markets to Europe.

In addition, the Lipper poll of 103 U.S.-domiciled funds invested in European stocks showed they raked in a net $214 million, the smallest inflow since July 2013, although the funds still managed to extend their longest winning streak on record into a 38th week.

Europe bourses in 2014: link.reuters.com/pad95v

Asset performance in 2014: link.reuters.com/rav46v

Today's European research round-up (Additional reporting by Blaise Robinson; Editing by Toby Chopra)