* FTSEurofirst up 0.9 percent
* Central bank stimulus seen supporting equities
* IAG, Essilor, EADS rise on earnings hopes
* RBS knocked as profits wane
* Euro STOXX 50 suffer first down month in eight
By David Brett
LONDON, Feb 28 European shares rose again on
Thursday, buoyed by fresh signs of central bank support and
upbeat corporate results which helped indexes pursue their
recovery of losses inflicted by Italy's inconclusive elections.
The FTSEurofirst 300 closed the last trading day of
February up 10.89 points, or 0.9 percent, at 1,171.47, and has
now recouped most of the losses sustained on Tuesday after
Italian elections ended in a stalemate.
Pledges by the European Central Bank and U.S. Federal
Reserve this week to sustain steps to inject liquidity into
markets have propped up equities.
"Markets have bounced well from the sell off earlier in the
week. Volumes, however, have been low and without the support
from central banks and governments the indexes would be much
lower than the levels we are currently at," Jawaid Afsar, sales
trader at SecurEquity, said.
Underlining Europe's problems, data on Thursday showed
Spain's economy shrank for the sixth straight quarter from
October to December, and at its fastest quarterly pace since
But the unprecedented economic stimulus has helped to boost
asset prices and kept a lid on bond and cash yields, which has
"It (still) looks like an attractive opportunity to move out
of quality bonds, particularly gilts and into equity," Guy
Foster, head of investment strategy at Brewin Dolphin, said.
Funds invested continued flow into European equities as
institutional investors moved away from lower-yielding money
markets on expectations of further monetary stimulus and
possible inflation, Lipper and EPFR Global data shows.
"At the moment however there's still more evidence of this
rally sucking in those who have been left in cash, rather than
the much fabled 'great rotation'," Brewin's Foster said.
And there are signs equity market gains are running out of
gas as economic concerns coupled with strong gains since June
2012 begin to take their toll.
The euro zone blue chip index fell 2.6 percent
over the past month, dragged down by Southern European indexes
in Italy and Spain, which fell as much as 8.7
percent as worries rose ahead of Italian elections.
Other euro zone indexes also finished down on the month with
Germany's DAX and France's CAC down 0.4 and 0.3
Credit Suisse said traders had been surprised at the
resilience shown in the equity market rebound this week,
particularly when hedge funds are reducing risk - its data
showed the long/short ratio recently slipped below 50 percent
for the first time this year.
Equity market falls, however, remain relative with the
EuroSTOXX 50 posting its first monthly loss after eight months
of gains, breaking what had been its longest winning streak
And investors continued to draw strength from an improving
economic picture in the world's largest economy where data
showed U.S. Midwest business rose to its highest level in nearly
Leading the gainers in Europe were the likes of British
Airways owner International Airlines, up 7.9 percent,
the world's largest maker of opthalmic lenses Essilor,
rising 5.9 percent, and Airbus parent EADS, climbing
5.5 percent, all buoyed by optimistic outlooks.
Those where a shadow has been cast over future earnings were
beaten down with oil services firm Petrofac lower for a
second day, down 2.9 percent as banks cut their forecasts after
results on Wednesday.
Miner Kazakhmys fell 8.6 percent hit by worries over
rising costs and after ENRC, in which Kazakhmys holds a
stake, warned late on Wednesday of "significant" asset
UK outsourcer Capita shed 2.9 percent on worries
over the outlook for its margins, while UK lender Royal Bank of
Scotland slipped 6.6 percent after its profits were hit
as the UK regulator steps up pressure on banks.