* FTSEurofirst 300 climbs 0.1 percent
* Barclays gains after slashing jobs
* Auto sector gloom hits related stocks
By Tricia Wright
LONDON, Feb 12 European shares traded modestly
higher on Tuesday, struggling for clear direction, as
strategists weighed in on whether the recent rally still has
further to run.
Britain's Barclays saw solid gains after announcing
hefty job cuts, while auto-related stocks came under pressure on
the back of downbeat earnings.
The FTSEurofirst 300 was up 0.1 percent at 1,155.15
by 1159 GMT, having traded within a narrow 4-point range on
Tuesday in the wake of the previous session's 0.7 percent drop.
The index has slipped around 2 percent from a two-year
closing high reached on Jan. 29.
Strategists indicated that the recent retreat by stocks
looked more like a pause than the start of a serious correction,
with the asset class attractive, particularly against a backdrop
of low interest rates and below-inflation bond yields.
"From an asset allocation perspective, equities are still
the major standout asset class that you'd probably want to own,"
Exane BNP Paribas head of equity strategy Ian Richards said.
"As far as I understand, when markets have travelled a long
way people automatically question the duration of any further
rally. I think it would be a mistake to take the trade off."
Standard Life Investments' global thematic strategist
Frances Hudson said: "I think if you've done your fundamental
analysis, there are decent opportunities and setbacks should be
used to pick up stocks that you like for the long term."
Standard Life Investments manages around 163 billion pounds
($255.3 billion) of assets.
The top FTSEurofirst 300 riser was Barclays, ahead
4.8 percent, with traders citing talk of potential upgrades
should the UK lender meet targets set out in the firm's update
Barclays is to axe at least 3,700 jobs and prune its
investment bank, under a restructuring plan launched by its new
chief executive which seeks to cut 1.7 billion pounds ($2.7
billion) in annual costs and improve standards.
"Barclays delivered exactly what the trading floor wanted
... upgrades and increased price targets to follow," Marc
Kimsey, senior trader at Accendo Markets, said in a note.
Trading volume in Barclays was robust, at 143 percent of the
90-day daily average, against the FTSEurofirst 300 index at 41
Michelin sank 3.3 percent, the worst performer on
the FTSEurofirst 300, as its results missed forecast and its
outlook for 2013 operating income fell short of analysts'
Auto parts maker Faurecia dropped 0.8 percent
after saying it is scrapping its dividend as it struggles to
counter Europe's auto slump.
The grim state of the European auto sector has had a
knock-on effect on other sectors.
Shares in Germany's biggest steelmaker ThyssenKrupp AG
shed 0.9 percent after saying a slump in steel prices
and weak car markets caused a sharp drop in profit.
Navigation device maker TomTom tumbled 7.9 percent
after warning that earnings would halve in 2013 because of weak
car sales and competition from providers of free maps.