* Spanish shares rise after strong services PMI
* FTSEurofirst 300 dips 0.1 pct, Euro STOXX 50 up 0.1 pct
* Eyes on ECB decision at 1145 GMT, conference at 1230 GMT
By Francesco Canepa
LONDON, April 3 Spanish shares outperformed flat
European markets on Thursday as strong services sector data
strengthened investor optimism about an economic recovery in the
struggling Mediterranean country.
Investors refrained from making large bets on pan-European
indexes as they waited to see whether the European Central Bank,
at a policy meeting, would offer more signs it is ready to take
steps to stop disinflation becoming deflation.
Spain's Ibex index, however, rose 0.7 percent,
taking its rise since its March low to around 8 percent, as data
showed the country's service sector expanded more than expected
last month, fuelling hopes of overall economic growth in the
Shares exposed to Spain's own economy, such as domestic
lender Bankia and broadcaster Mediaset Espana
led risers on the Ibex, both adding around 2 percent.
The Ibex as a whole has risen nearly 40 percent since late
June 2013 as the country began to emerge from a deep recession.
The index has outperformed its peers in core European countries,
such as Germany's Dax.
"Spain is clearly doing its part," Mike Reuter, global
equity broker at Tradition. "Bar anything extraordinary
happening, the Ibex is going to have a strong year again
compared to the Dax."
The German index was down 0.1 percent at 1030 GMT. The
pan-European FTSEurofirst 300 was also down 0.1
percent, at 1,342.15 points, while the euro zone Euro STOXX 50
was up 0.1 percent at 3,191.64 points, having set a
fresh 5-1/2 year high at 3,197.05 points earlier in the day.
The FTSEurofirst 300 has risen for the past seven sessions,
partly due to speculation that the ECB may signal it is prepared
to cut deposit rates below zero - effectively charging banks to
hold cash with the bank - or embarking on bond purchases as the
United States, Japan and Britain have.
Market calls for ECB action mounted on Thursday as surveys
showed that while euro zone businesses logged their busiest
quarter in three years at the start of 2014, they did so by
slashing prices, underscoring fears that deflation may soon
afflict the region.
However, there has been little sense that a majority of ECB
officials favours imminent use of any of those tools and most
may prefer to keep such policies on standby in case of an
external economic shock. The bank is due to
The bank was due to announce its rate decision at 1145 GMT
and hold a press conference at 1230 GMT.
"I think the market has got ahead of itself, ahead of the
ECB," said Darren Courtney-Cook, head of trading at Central
Markets Investment Management.
"I don't think we'll do too much ahead of the ECB. My own
view is that if they cut, we may rally for a bit and then sell
off, and if they don't cut, markets will sell off."
British-listed oil services firm Tullow Oil topped
the FTSEurofirst, rising by 4.9 percent, as UBS upgraded the
stock to "buy" from "neutral", citing significant upside
potential for the group's onshore business.
Tullow suffered a string of disappointing drilling results
and lost a quarter of its value in 2013, when it was the
worst-performing stock on Britain's FTSE 100 outside of
the mining sector.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Sudip Kar-Gupta; Editing by Susan