* FTSEurofirst 300 up 0.6 pct, Euro STOXX 50 up 0.6 pct
* Telecom Italia surges on speculation of unit sale
* Europe stocks saw record inflows from US in 2013 -Lipper
By Blaise Robinson
PARIS, Jan 3 European stocks rose on Friday,
recouping some steep losses suffered in the first session of the
year, with Telecom Italia surging on speculation of a
sale of its Brazilian wireless unit.
Retailers also gained ground, led by Britain's Next,
soaring 9.9 percent after reporting strong Christmas sales,
raising its profit forecast and unveiling a special dividend.
Volumes were light across the market, however, as many
market players were still away following the New Year break.
At 1530 GMT, the FTSEurofirst 300 index of top
European shares was up 0.6 percent at 1,312.85 points,
recovering some poise after making a negative start to the year
with a 0.8 percent drop on Thursday.
"We're in a tight range today, with very low volatility. The
market is moving sideways which makes trading quite difficult.
We'll have to wait for next week to really see a trend
emerging," said Margarita Rivas, sales trader at GVC Gaesco
Valores, in Madrid.
Shares in Telecom Italia surged 5.6 percent on a
report that Spain's Telefonica was readying a joint
offer for the Italian company's Brazilian wireless unit TIM
Shares in Portugal's Banco Espirito Santo also
featured among the top gainers, up 6.6 percent, benefiting from
a fall in the country's sovereign bond yields and catching up
with recent gains in the country's banking sector.
Portugal's benchmark 10-year bond yields were
at their lowest since May, tracking other euro zone peripheral
issuers and reflecting confidence that the economic outlook in
the euro zone, including bailed-out Portugal, is improving.
Around Europe, the UK's FTSE 100 index was up 0.4
percent, Germany's DAX index was 0.5 percent higher,
France's CAC 40 was up 0.6 percent, and the euro zone's
blue-chip Euro STOXX 50 index was 0.6 percent
higher, at 3,079.56.
The start of the year tends to see investors putting fresh
money into equities, but this time there has been some caution
after a stellar 2013, when the FTSEurofirst 300 gained 16
percent and the euro zone blue-chip Euro STOXX 50 index
rose 18 percent.
"What we have seen from slightly more longer-term accounts
is that they have had a cracking return from 2013 and they have
taken some risk off the books," said Jordan Hiscott, a senior
trader at Gekko Global Markets, in London.
"They are looking to see which way the market moves in the
first few weeks of January before taking new long positions."
European equities enjoyed record net inflows of $16.3
billion from U.S. investors in 2013 - nearly three times the
previous record of $5.8 billion seen in 2006, according to
Thomson Reuters' Lipper service.
The inflows strongly accelerated in the last quarter of the
year. Investors poured in $7.6 billion in October-December as
improving economic data and a more dovish European Central Bank
prompted U.S. investors to scoop up shares, helping European
benchmark indexes wrap up their best annual performance in four
Asset returns in 2013: