* FTSEurofirst 300 up 1.4 pct, rallying with Wall St
* Index had faltered after Draghi offers little new
* Alcatel-Lucent surges 8.5 percent after results
* Indexes rebound after hitting "oversold" levels
By Alistair Smout
LONDON, Feb 6 European equities bounced back on
Thursday after a two-week drop, with reassuring earnings reports
boosting shares despite the European Central Bank dashing hopes
of some immediate extra monetary easing.
Heading into the close the pan-European FTSEurofirst 300
was up at intraday highs, rallying with Wall Street
despite a temporary setback after the ECB left interest rates on
The index pared its gains during a press conference in which
ECB President Mario Draghi revealed no specific measures to ease
policy further, holding off on any action pending new economic
forecasts next month.
However, the pullback was short-lived, with traders finding
reasons to be hopeful that the central bank may introduce
additional measures in March.
"Not many economists were predicting a change in policy, so
it shouldn't come as much surprise, but in the run up to the
meeting there had been a pick-up in speculation that he might do
something," Alastair McCaig, analyst at IG, said.
"Disappointing that nothing was really said, but with
inflation so low, it does feel that he has no more leeway, so
unless that improves then actions will have to be taken next
Buying was supported by data from the fourth-quarter
earnings season, which has gathered pace in Europe.
Alcatel-Lucent surged 8.5 percent in heavy volumes
after the telecom gear maker posted forecast-beating gross
margins and operating profit, prompting hedge fund short sellers
to unwind negative bets on the stock.
According to data from Markit, about 9 percent of Alcatel's
shares are out on loan, up from 6.3 percent in mid-December,
making it the most shorted stock on France's CAC 40.
Short selling involves selling borrowed shares in the
expectation of being able to buy them back more cheaply later.
AkzoNobel rose 7.6 percent, the second-biggest
gainer on the FTSEurofirst 300 as the Dutch paints and
chemicals firm reported higher-than-expected earnings and hoped
to meet its 2015 targets.
Trading volumes of Alcatel-Lucent and AkzoNobel were 280
percent and 360 percent of their 90-day daily average, against
93 percent for the FTSEurofirst 300.
Charts show the euro zone's blue-chip Euro STOXX 50 index
rebounded after its nine-day relative strength index
(RSI) slipped to 26 in the previous session. A level below 30 is
considered "oversold" and often attracts buyers.
The index was up 1.5 percent at 2,008.16 points by 1527 GMT,
while the pan-European FTSEurofirst 300 index rose 1.4 percent
to 1,289.16 points after its RSI fell to 27 on Wednesday.
"It's very likely to see a short-term stabilisation in the
market as we have seen an 'oversold' situation and the Euro
STOXX 50 index is nearing some important support zones,"
Thorsten Grisse, technical strategist at Commerzbank, said.
"It does not mean that the recent consolidation process is
over, but from a medium-term perspective, we are still in a fine
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