* FTSEurofirst 300 up 0.9 pct
* Growth-sensitive sectors lead miners higher ahead of Fed
* Anglo American, Antofagasta post record copper output
* Spain outperforms, in positive territory for the year
By Alistair Smout
LONDON, Jan 29 European shares rose on Wednesday
after Turkey ramped up its interest rates overnight to defend
its currency, helping buoy stocks that had been hit by a selloff
in emerging markets.
Sectors sensitive to global growth trends, such as miners
, led the market higher after Turkey's central bank
jacked up its overnight lending rate to 12 percent from 7.75
percent in a much sharper move than forecast. Investors said the
move could help stem a recent sell-off in emerging markets.
The pan-European FTSEurofirst was up 0.9 percent at 1,309.41
at 0836 GMT, having fallen 4.2 percent in three sessions into
the beginning of this week.
"They acted quite aggressively, and you might see others
follow suit. We could push on to further gains in Europe," Mike
Harris, partner at TJM Partners, said. But he said the market
would also be watching the U.S. Federal Reserve, which meets on
Wednesday to discuss further slowing of its stimulus programme.
Turmoil in emerging markets is unlikely to deter the Federal
Reserve from trimming its bond-buying stimulus by a further $10
billion on Wednesday.
An emerging market sell-off last summer was triggered when
the Fed indicated that it would start slowing asset purchases by
the end of the year, although the first round of "tapering" in
December was met with a muted response.
"Given that the last reaction to the Fed meeting and the
decision to taper was relatively positive, I think the Fed feel
they can comfortably taper 10 billion and keep things relatively
under control. But we have had a warning that the markets can
turn here in the last few days," Harris said.
Leading the miners higher were Anglo American and
Antofagasta, up around 5 percent, after both posted
record copper production, on a quarterly and a yearly basis
Peripheral markets rallied strongly, with the Spanish
up 1.5 percent, benefiting from a recovery in sentiment
towards the Latin American markets it has heavy exposure to, and
also a continued drop in sovereign yields that have been largely
unscathed in the past week.
The index is now back in positive territory for the year,
unlike Germany's DAX and Britain's FTSE, having
outperformed in early January signs of life in its domestic
"Europe's stabilised, and Spain has done the right things.
It's actually now a shame that they have that emerging market
exposure, because underlying Spain isn't horrific any more,"
Nick Xanders, who heads up European equity strategy at BTIG,
said, adding there could be further jitters over emerging
markets to come.
"In this sort of rally, you've got to sell down emerging
market exposure, and you want to have exposure to the European
Today's European research round-up
Asset returns in 2013: