* Peripheral European markets outperform
* Lisbon's PSI-20 rises as bond yields fall
* Volumes low as public holiday in most of Europe
* FTSEurofirst 300 at highest since early 2008
* Euro STOXX 50 near 6-year high
By Sudip Kar-Gupta
LONDON, June 9 Spain, Italy and Portugal
outperformed other European stock markets on Monday, as
investors stepped up bets that they would benefit most from the
European Central Bank's latest economic stimulus measures.
The gains in Madrid, Milan and Lisbon propped up key
pan-European equity indexes, although volumes were thin due to
public holidays in several European countries.
Lisbon's PSI-20 equity index rose 0.3 percent. Also
supporting sentiment was a drop in Portugal's 10-year bond yield
to its lowest level since January 2006 on expectations the
country's recovery from the euro zone debt crisis would gather
In Italy and Spain, benchmark share indexes rose by 0.4
percent, building on last week's rally that was driven by the
European Central Bank's new economic stimulus steps.
The ECB on Thursday cut interest rates, launched a series of
measures to pump money into the euro zone economy and pledged to
do more if needed to fight off the risk of Japan-like deflation,
sparking a rally in European equities.
The Italian and Spanish markets are more heavily weighted
towards "cyclical" stocks such as banks, which often outperform
in a strengthening economic cycle, than other European markets.
"People feel that the banks in those countries are most
exposed to improved funding," said Andrea Williams, European
equities fund manager at Royal London Asset Management.
The euro zone's blue-chip Euro STOXX 50 index
rose 0.1 percent to 3,296.29 points, close to a six-year high.
The pan-European FTSEurofirst 300 index advanced by
0.3 percent to 1,392.16 points, near its highest level since
Luca Paolini, chief strategist at Pictet Asset Management,
said he would favour such "cyclical" equity sectors for now,
while Saxo Banque trader Pierre Martin said the trend for
European stock markets remained positive.
"Overall, it's a great scenario for equities: very low
interest rates, very low inflation, and the U.S. and European
economies in recovery mode," he said.
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 Blaise Robinson; Editing by Toby
Chopra/Louise Heavens/Susan Fenton)