* FTSEurofirst 300 up 0.2 percent
* Telecom Italia up as Telefonica agrees to raise stake
* Carnival top faller as profit drops
* Technical analysts see scope for more gains
By Tricia Wright
LONDON, Sept 24 European shares crept up on
Tuesday as merger and acquisition activity in the telecoms
sector outweighed downbeat U.S. and German data and weakness
from cruise operator Carnival which posted a drop in profits.
Telecom Italia advanced 2.6 percent after
Telefonica agreed to raise its stake in the Italian
firm, adding to the recent chain of deals involving European
This helped the FTSEurofirst 300 climb 0.2 percent
to 1,258.05 by 1502 GMT, but the index was pegged back by U.S.
consumer confidence, which slipped in September, and the Ifo
index showing German business morale improving less than
expected last month.
The euro zone's blue-chip Euro STOXX 50,
meanwhile, rose 0.5 percent to 2,921.52 points.
Carnival topped the FTSEurofirst 300 fallers' list,
off 5.4 percent, as it warned it could report an adjusted loss
for the current quarter after posting a 30 percent drop in its
While markets have recently fallen foul of volatile trade,
driven by uncertainty as to when the U.S. Federal Reserve will
scale back its monetary stimulus, some investors remain bullish
on equities, focusing firmly on positive developments in Europe.
Dipesh Mesuria, senior research analyst at Berry Asset
Management, cited ECB President Mario Draghi's mention on Monday
that the central bank would inject more liquidity into banks if
required as one such example alongside M&A activity in Europe.
"There's a lot of positive stuff coming out of Europe; The
U.S. is obviously creating a bit of noise but I'm not so worried
"After years of underinvestment, and building and
strengthening their balance sheets, (companies) are finally
ready to put some of that cash into long-term growth. I would
only see M&A activity increasing from here."
Expectations of reduced stimulus in the United States -
which abated when the Federal Reserve left policy unchanged at
last week's meeting - were reignited by New York Fed President
William Dudley on Monday.
The influential official said the U.S. central bank still
aims to scale back the pace of its asset purchases later this
year as long as the economy keeps improving.
Continued political discord over the U.S. budget also kept
markets on edge, raising the prospect of a federal government
shutdown if a deal is not struck by month-end.
Nevertheless, technical analysts saw scope for further gains
on the Euro STOXX 50 - even after a powerful run which has seen
it rise more than 7 percent in September.
"Although further short-term weakness is possible, and could
even take the index back to 2,850 or so, there is little in the
chart to suggest that a significant pull-back is imminent and a
push up through 3,000 still looks possible in the near term,"
Charles Stanley technical analyst Bill McNamara, said.