* FTSEurofirst ends up 0.6 pct at 1,192.87 points
* Ashmore in-flows boosts fund management stocks
* SG backs "long" FTSEMIB, "short" DAX -trade
* Investors' 2013 outlook still bullish
By Sudip Kar-Gupta
LONDON, April 11 European shares rose for the
fourth consecutive day on Thursday, as bumper gains for asset
managers benefiting from this year's equity rally lifted
Fund managers and traders said that even if there was a
near-term pull back, as some investors look to sell shares to
book profits on this year's rally, it would not be enough to
prevent European equity markets from gradually rising higher
over the course of the year.
The pan-European FTSEurofirst 300 index closed up
0.6 percent at 1,192.87 points, pushing the index back towards a
4-1/2 year peak of 1,209.05 points reached last month.
The euro zone's blue-chip Euro STOXX 50 advanced
0.5 percent to 2,674.33 points. The FTSEurofirst 300 is now up 5
percent so far this year while the Euro STOXX 50 has risen
around 2 percent.
The STOXX Europe 600 Financial Services Index was
the best-performing sector, as a 13 percent surge in fund
manager Ashmore on news it had drawn in more new client
money than expected lifted other asset management stocks.
Jean-Luc Eyssautier, senior product specialist at Union
Bancaire Privee (UBP) Investment Management, said equities
remained well-placed for more gains, despite a weak economic
outlook in Europe caused by the region's sovereign debt crisis.
"We believe 2013 will be a bumpy year but one where
ultimately equities should close higher," he said.
SOME PREFER JAPAN TO EUROPEAN SHARES
A Reuters poll last month showed that fund managers and
analysts expected the Euro STOXX 50 to rise to 2,935 points by
the end of 2013.
While the majority of investors are bullish on equities as a
global asset class, with stocks offering better returns than
bonds and cash, some are more negative on European equities
compared to U.S. or Asian equities.
Japanese stocks have surged in recent weeks after fresh
stimulus measures by the Bank of Japan, and ING Investment
Management strategist Patrick Moonen preferred Japan to Europe.
Moonen said European equities could underperform due to the
region's lingering debt crisis problems, as highlighted by
Cyprus's bailout, problems in Portugal with austerity measures
and a political deadlock in Italy.
However, strategists at Societe Generale's cross-asset
research team expected the Italian deadlock to be resolved soon,
and backed a trade to bet on gains on Italy's FTSE MIB
equity index while betting on a fall on Germany's DAX.
"While the euro zone carries some tail risks, we think the
Italian political problems are likely to find some resolution
during Q2 2013 - thus the Italian discount is likely to
decline," they wrote in a note.
A 3.3 percent decline in German carmaker Daimler
took the most points off the DAX and FTSEurofirst on Thursday.
Investment bank Natixis cut its price target on Daimler and
the stock was one of the most "shorted" in early April in terms
of traders betting on the stock declining in future, according
to data from Sungard Astec Analytics.
British retailer Marks & Spencer was the best
performing FTSEurofirst 300 stock, rising 4.3 percent after
sales of non-food products at M&S did not fall by as much as
some had feared.
European equities remain attractive on valuation grounds for
According to Thomson Reuters Starmine data, the pan-European
STOXX 600 index has a "smartestimate" - which favours
the top-rated analysts - of 12.3 times for its price-to-earnings
ratio over the next 12 months.
This is a cheaper rating than a comparative
price-to-earnings multiple of 14 for the U.S. S&P 500
index, according to Starmine.
"Our current views are that European equities are cheap
relative to other major markets," said Tim Gregory, head of
global equities at Psigma Investment Management.