* FTSEurofirst 300 up 0.4 percent
* Miners buoyed by China stimulus hopes
* Fresenius up, drops Rhoen takeover plan
* ARM hurt by Deutsche Bank downgrade
By Tricia Wright
LONDON, Sept 3 European shares advanced on
Monday, led higher by mining stocks after weak data from China
fuelled hopes for further stimulus from the world's top metals
consumer, in the run-up to this week's key European Central Bank
Miners were the standout risers, up 1.6 percent, as
two complementary surveys showed China's manufacturing sector
has been badly hit by slowing new orders, results which could
strengthen the case for further policy steps to bolster growth.
Kazkhmys, Rio Tinto and BHP Billiton
enjoyed respective gains of 2.5 percent, 2.3 percent, and 2
"The market cycle is much more connected to the monetary
cycle than the economic cycle," Philippe Gijsels, head of
research at BNP Paribas Fortis Global Markets, said.
"Economic data remains weak, what we get from China is not
too fantastic at the moment. You could expect that to have a
negative impact on the markets, but I think that markets will
really focus on liquidity injections that are going to come."
The FTSEurofirst 300 was up 0.4 percent at 1,086.82
by 0856 GMT, in trading volume at 13 percent of its 90-day daily
average, having ended 0.5 percent higher on Friday after U.S.
Federal Reserve Chairman Ben Bernanke kept the door open for
further stimulus if needed.
The focus is now squarely on the ECB's meeting on Thursday,
with investors hopeful ECB President Mario Draghi will offer
some details about the bank's bond-buying scheme to lower
borrowing costs of countries such as Spain and Italy.
"It's all on hold for the ECB is what we're seeing... I
rather fear that we're not going to get clarity. We'll probably
sell off if we don't get a full bond-buying programme," Joe
Rundle, head of trading at ETX Capital, said.
Rundle reckoned that, in the case of disappointment, the
FTSEurofirst 300 could test the 1,050 area, support seen at the
beginning of August.
Societe Generale said in a note that it expected new clues
from Thursday's meeting, but with final details only after a
German Constitutional Court ruling on Sept. 12 that could have
an impact on the ECB's bond-buying plans.
It added, however, that a rate cut may come this week.
Elsewhere among the top gainers on Monday, Fresenius
climbed 2.5 percent after pulling the plug on plans to
take over Rhoen-Klinikum, which slid around 20
Volume in Fresenius was solid, at 34 percent of the 90-day
ARM, meanwhile, featured on the FTSEurofirst 300
fallers' list, off 2.4 percent, after Deutsche Bank cut its
rating for the British chip firm to "sell" from "hold", mainly
on valuation grounds.