* FTSEurofirst 300 up 0.7 percent
* Euro zone business recovery ends year on a high - PMI
* Telecom Italia up on news of BlackRock stake increase
* Deutsche Telekom gains on T-Mobile US report
By Tricia Wright
LONDON, Dec 16 European shares rebounded on
Monday as encouraging economic data out of the euro zone
outweighed concern over the outlook for U.S. monetary policy,
with Aggreko leading gainers after a bullish trading
Shares have suffered steep losses in the past two weeks as
recent robust U.S. data has fuelled expectations the Federal
Reserve will start to scale back its bond-buying programme at
this week's policy meeting.
Lifting the mood, surveys indicated euro zone businesses
ended the year on a high as new orders surged, with Markit's
Flash Eurozone Composite Purchasing Managers' Index (PMI) rising
to 52.1 in December from 51.7 last month.
It was the second-highest reading since mid-2011 and beat
the median forecast in a Reuters poll for 51.9.
"There's no doubt that markets remain incredibly nervous
about the prospect of stimulus withdrawal in the United States,"
Henk Potts, market strategist at Barclays, said.
"But... the fact that data shows improvement in the United
States and at least a stabilisation in Europe... that should
help allay fears about the longer-term prospects."
The FTSEurofirst 300 was up 0.7 percent at 1,251.11
points by 1146 GMT, trimming its monthly loss to around 3
percent, while the euro zone's blue chip STOXX 50
advanced 1.3 percent to 2,958.81 points.
British temporary power provider Aggreko led gainers with a
5.7 percent rise after saying full-year results were likely to
be slightly ahead of expectations, driven by increased
underlying revenue across its global power business.
It said strong cash generation and lower capital expenditure
were expected to reduce net debt by 200 million pounds ($325.6
million) compared with the previous year.
Broker WH Ireland upgraded its full-year 2013 pretax profit
forecast for Aggreko by 2.5 percent to 335 million pounds in
response, highlighting that the debt reduction will create
"further options for the business in the coming year".
Trading volume in Aggreko was robust, at just over its
90-day daily average, against the FTSEurofirst 300 on a third.
Telecom Italia also posted solid gains of 4.6
percent on news U.S. money manager BlackRock has increased
its stake in the phone group.
Sector peer Deutsche Telekom, meanwhile, climbed
4 percent, boosted by a report in The Wall Street Journal that
Sprint Corp was mulling a takeover of T-Mobile,
which is majority-owned by Deutsche Telekom.
Technical analysts were upbeat on the prospects for the Euro
STOXX 50, with the 100-day moving average, now at 2,930, acting
as a floor. Valerie Gastaldy, head of technical analysis firm
Day By Day, reckons the index has scope to rise to between 3,000
and 3,100 by the end of the year.
"It looks more like what we have been through is a
correction rather than a proper reversal of the trend. We're
looking to buy that weakness."