* FTSEurofirst 300 up 0.1 percent
* Bouygues top riser post results
* Charles Stanley targets drop to 2,500 for Euro STOXX 50
By Tricia Wright
LONDON, Feb 27 European shares opened up on
Wednesday, clawing back some of the previous session's sharp
losses, helped by the U.S. Federal Reserve's defence of its
asset-buying programme, though jitters over the euro zone might
Fed Chairman Ben Bernanke strongly defended the U.S. central
bank's monetary stimulus on Tuesday, which eased worries over a
possible early retreat from bond purchases, and made for a
firmer close on Wall Street.
The FTSEurofirst 300 was up 0.1 percent at 1,151.62
by 0901 GMT, buoyed by banks, big fallers on Tuesday
when the broader index dropped 1.4 percent after an Italian
election stalemate revived worries about the future of the euro
The euro zone's blue-chip Euro STOXX 50 index
firmed 0.3 percent to 2,577.99, having sunk 3.1 percent to three
month lows on Tuesday, extending its retreat from an 18-month
high of 2,754.80 points hit at the end of January.
"After the Italian election results it seems that rallies
might well be sold from here on," said Lex van Dam, hedge fund
manager at Hampstead Capital, which manages around $500 million
Bouygues was the top riser on the FTSEurofirst
300, ahead 7.6 percent, after the French construction-to-media
conglomerate unveiled a 3 percent rise in full-year sales,
whilst maintaining its dividend.
Airbus parent EADS was another strong gainer, up
5.7 percent, as it predicted higher profit this year on the
heels of stronger than expected 2012 earnings and a clampdown on
Charts painted a gloomy picture. Charles Stanley technical
analyst Bill McNamara highlighted that the Euro STOXX 50 has
entered a new volatile phase, with the drop from Monday's peak
to Tuesday's closing low a hefty 4.8 percent.
"A bounce today looks likely but this rising volatility does
look like it could lead to lower prices in the medium-term, with
2,500 a realistic downside target," he said.
However, both the Euro STOXX 50 and the FTSEurofirst 300
index are 20-25 percent above their 2012 lows, since a pledge
last year by the European Central Bank (ECB) to protect the euro
currency from the area's debt crisis did much to bolster
investor confidence in the region.
BCA Research wrote in a note that the full-year outlook for
global equities remained positive, given the backdrop of a
gradual improvement in the world economy and the fact that
equities offer more than cash or bonds, where returns have been
hit by record low interest rates.
"This creates a 'sweet spot' for equity investors - modest
growth, low inflation and negative real rates will support
corporate earnings and embolden risk taking," wrote BCA