* FTSEurofirst 300 up 0.2 percent
* Miners gain after robust U.S. data
* Telefonica drops after share placement
By Tricia Wright
LONDON, March 26 European shares edged higher on
Tuesday as the market focused on data showing continued gradual
improvement in the U.S. economy, with the implications of a
Cyprus bailout remaining unclear.
The FTSEurofirst 300 ended up 0.2 percent at
1,188.57, after a see-saw session which saw investors unsettled
by concern that a rescue plan for Cyprus might turn out to be a
template for other euro zone economies requiring bailouts.
Brightening the mood, data showed demand for long-lasting
U.S. manufactured goods surged in February, suggesting factory
activity continued to expand at a moderate pace, even though a
gauge of planned business spending slipped.
Mining stocks, highly geared to the economic cycle,
notched up solid gains on Tuesday, ahead 0.5 percent.
"Markets are struggling to find direction due to the
confusing position taken by authorities in relation to Cyprus
although they're continuing to react to positive data from the
United States," Henk Potts, market strategist at Barclays, said.
"The corporate fundamentals remain very supportive indeed.
Any signs of weakness should be used to gain exposure to an
asset class that we think will continue to outperform in the
medium to long term."
Shares in Greece, Italy and Spain
remained under pressure as investors fretted about what might
happen next in the euro zone's struggling states. The Euro STOXX
50 index fell 0.3 percent to 2,641.12.
Spanish telecom group Telefonica tumbled almost 5
percent, in trading volume at around 2-1/2 times the 90-day
daily average, after a sale of all of its treasury stock -
equivalent to 2 percent of its capital.
Espirito Santo said in a note that while the move should be
seen in light of efforts to reduce debt and leverage, "it might
also signal that following the stock's strong rally since the
recent lows and the end of February, the company sees limited
upside in the shares at least in the short term".
Charts painted a bearish picture. Fawad Razaqzada, analyst
at GFT Markets, said the Euro STOXX 50 is looking "very fragile"
in the aftermath of a 1.2 percent drop on Monday which pushed it
below its 50-day moving average.
"All eyes are on that 2,600 level again - and if the buyers
don't show up there then I wouldn't be surprised to see the
index reach, and possibly break, 2,555 over the next few days or
so," he said.