(Updates with closing prices)
* FTSEurofirst 300 gains 0.7 pct, up 3.3 pct since mid-March
* Easing tensions over Ukraine, U.S. data help lift mood
* Spanish stocks outperform as country's recovery 'on track'
* "It's not time to look at P/E ratios" -Fidelity's Anand
By Blaise Robinson
PARIS, March 26 European stocks rose on
Wednesday as easing tensions over Ukraine and positive U.S.
economic data helped the market extend the recovery rally that
started in mid-March.
Spanish stocks outperformed the broader market, with lenders
Banco Santander and BBVA both up 2.1 percent,
rallying after the Bank of Spain said the country's economic
recovery was on track. It saw GDP expanding by 1.2 percent in
2014, above government forecasts.
Boosting the mood on both sides of the Atlantic, U.S. data
showed orders for long-lasting manufactured goods rebounded last
month and shipments snapped two consecutive months of declines.
Growth in the private sector meanwhile accelerated in March at a
faster pace than in the previous month, reassuring investors on
the country's economic growth.
European companies with strong exposure to the U.S. economy
rallied, with Ray Ban sunglasses maker Luxottica up 2.9
percent and advertising agency Publicis up 2.4
Also helping sentiment, tensions between the West and Russia
over Ukraine were easing on Wednesday, after U.S. President
Barack Obama and allies agreed to hold off on further economic
A number of European blue-chips with big exposure to Russia
featured among the top gainers, with Finnish tyre maker Nokian
Renkaat up 2.8 percent and Austrian lender Raiffeisen
Bank International up 1.3 percent.
The FTSEurofirst 300 index of top European shares
added 0.7 percent at 1,319.38 points. The benchmark index has
risen 3.3 percent since mid-March.
"The door is open for indexes to move back to 2014 highs,
and we're not far from these levels. There are just no signals
of weakness, and the buying pressure is very powerful," Aurel
BGC chartist Gerard Sagnier said.
Spanish stocks surged, with Madrid's IBEX benchmark
gaining 1.5 percent, reflecting investors' bet that euro zone
peripheral economies are picking up pace.
So far this year, Italy's FTSE MIB is up 11
percent, Portugal's PSI 20 up 15 percent and Ireland's
ISEQ up 10 percent.
Spain's IBEX is up 2.3 percent - hurt by worries over
Spanish companies' strong exposure to Latin America - but still
outpaces the broad FTSEurofirst 300, which is flat on the year,
while Germany's DAX is down 1.1 percent and UK's FTSE
100 down 2.1 percent.
Paras Anand, head of European equities at Fidelity Worldwide
Investment, saw further big gains for European stocks, even if
valuation ratios have already moved back to long-term averages.
"With investors shifting out of fixed income, the demand for
European stocks will be growing in the next year, and that's
much more important than price-to-earnings ratios," he said.
"We could be at the forefront of a very strong recovery in
corporate activity in Europe, the amount of cash in balance
sheets is tremendous. It's not time to look at P/E ratios, there
are many more metrics out there that are more interesting."
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Editing by Catherine Evans)