* FTSEurofirst 300 up 0.2 pct in late trading
* Healthcare stocks boosted by gains at Shire
* Traders see support for equities from M&A and ECB
By Sudip Kar-Gupta
LONDON, June 17 European stock markets rose on
Tuesday, to claw back ground lost in previous sessions, as new
signs of possible takeover activity pushed up major healthcare
and pharmaceutical stocks.
The pan-European FTSEurofirst 300 index rose by 0.2
percent to 1,387 points, after falling in the last two sessions
from 6-1/2 year highs.
The euro zone's blue-chip Euro STOXX 50 index
gained 0.3 percent to 3,271.70 points and Germany's DAX
rose by the same margin to 9,915.27 points, having recently
slipped from its June 10 record high of 10,033.74 points.
Healthcare stocks such as Novo Nordisk and its UK
rival Shire added the most points to the FTSEurofirst
300. Shire rose 3.3 percent after Reuters reported that the
company had hired investment bank Citi as an adviser,
expecting to receive takeover approaches following a wave of
deals in the healthcare sector.
Sunrise Brokers' equity strategist Christopher Mellor backed
healthcare stocks as his preferred equity sector for this month.
The prospect of high margins, improving earnings and
possible merger and acquisition (M&A) activity made the sector
an appealing one for investors, he said.
"There is more scope for M&A activity, in a sector that has
historically been quite M&A-heavy," he said.
UPTREND SEEN INTACT
Over the last two sessions, European stock markets had
retreated from multi-year highs as violence in Iraq pushed up
the price of oil and knocked back airline and travel stocks.
However, many traders have said new economic stimulus
measures from the European Central Bank should ensure that any
pullback will be relatively short-lived, and the FTSEurofirst
300 remains up by 5 percent since the start of 2014.
"While in reality, earnings growth will now probably be
lower than we expected for the full year, this weak start to the
year in terms of earnings should be offset by the measures
announced by the ECB," said Andrew Arbuthnott, head of large-cap
European equities at Pioneer Investments.
Andreas Clenow, hedge fund trader and principal at ACIES
Asset Management, also said it was very risky to bet on an end
to the equity market rally.
"We may see a pullback for a couple of days, but in my view,
it's nothing. This is a very strong bull market, and betting
against it is a bad idea," said Clenow.
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 Alistair Smout; Editing by Susan