Auto makers help European shares rise for 7th straight day

Wed Apr 2, 2014 4:17am EDT

* FTSEurofirst 300 up 0.1 pct, Euro STOXX 50 up 0.2 pct

* Auto makers help indexes stretch rise into 7th session

* Deutsche Post tops gainers on strong outlook

* ADP data disappointment may cause volatility - Soc Gen

By Francesco Canepa

LONDON, April 2 (Reuters) - European shares looked set to stretch their winning streak into a seventh straight day on Wednesday as positive U.S. car sales data boosted auto makers and helped underpin an improving macroeconomic picture from the United States.

The STOXX Europe 600 Auto & Parts index rose 0.8 percent to outperform all other sectors after data showed automakers reported a 5.7 percent annual rise in U.S. sales in March, which can help them make up for still muted demand in Europe.

Sports-car maker Porsche, which saw its U.S. sales rise 9.2 percent in March, added 2 percent. BMW, which derives 17 percent of its revenue from the United States, its largest market, rose 1.4 percent after reporting a 7.9 percent U.S. sales increase.

"With better U.S. sales you can compensate for weaker sales in Europe," said Michael Punzet, auto analyst at DZ Bank. "Clearly the premium manufacturers like BMW, Mercedes, Audi and Porsche are best positioned to benefit from the U.S."

The positive car sales figures build on upbeat U.S. factory activity data published on Tuesday, which had helped send a key euro zone index to its highest closing level since September 2008, although it also raised the bar for the release of U.S. jobs data later this week.

The Euro STOXX 50 was up 0.2 percent at 3,192.71 points at 0756 GMT, testing a 5-1/2 year high set on the previous day.

The pan-European FTSEurofirst 300 rose 0.1 percent to 1,342.36 points, having rallied 3.7 percent in the previous six sessions.

Topping the index was Deutsche Post, the world's biggest postal and logistics group, which gained 3.5 percent after unveiling its new medium-term financial targets, with traders saying targeted growth in earnings looked attractive.

U.S. JOBS

U.S. durable goods orders and employment numbers may affect market direction later in the session as investors try to gauge the strength of growth in the world's largest economy ahead of the closely followed non-farm payroll release on Friday.

The ADP National Employment Report is expected to show private employers added 195,000 workers in March, up from February, and Societe Generale analysts said a disappointing figure would send shockwaves through the market.

"We expect the ADP National Employment Report to trigger yet another bout of market volatility ahead of the (NFP) on Friday," Soc Gen said in a note.

"Our statistical model for this hiring gauge suggests that a below-consensus 150,000 net new positions were created in March, little improvement from the 139,000 jobs added in February."

Traders said the Federal Reserve's renewed commitment to keep an ultra-easy monetary policy might mitigate the market impact of any disappointment in the data.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up

(Additional reporting by Alistair Smout; Editing by Gareth Jones)

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