* FTSE MIB and IBEX outperform
* Investors still expect de-escalation to Ukraine tensions
* Russia and United States set for talks over Ukraine
* FTSEurofirst 300 flat in late session trading
* Euro STOXX 50 edges higher
* Adidas warns of hit from Russian rouble and EM currencies
By Sudip Kar-Gupta
LONDON, March 5 European shares were steady on
Wednesday as the United States and Russia planned talks to ease
tensions over Ukraine, while Spain and Italy outperformed on
fresh signs of an economic rebound in those countries.
The pan-European FTSEurofirst 300 index, which fell
2.2 percent at the start of the week on fears of a conflict
between Russia and Ukraine, was flat at 1,344.84 points in late
The euro zone's blue-chip Euro STOXX 50 index
inched up 0.1 percent to 3,137.84 points, but the Spanish and
Italian markets - dubbed by the "periphery" many investors, as
compared to the "core" of Germany and France - fared better.
Italy's benchmark FTSE MIB equity index rose 0.9
percent while Spain's benchmark IBEX index advanced by
0.8 percent, outperforming falls in Germany and France.
The Milan and Madrid bourses rose after Markit composite
purchasing managers' indexes (PMIs) for Italy and Spain both
beat forecasts and came in above the 50 mark that separates
growth from contraction.
Analysts added that speculation about fresh action from the
European Central Bank on Thursday to spur the region's economy
and fend off the threat of ultra-low inflation was acting as an
extra support for European equities.
Andrea Williams, European equities fund manager at Royal
London Asset Management, backed Italian and Spanish stocks such
as Italian airport and motorway operator Atlantia,
Spanish electricity grid operator Red Electrica and
Spanish oil group Repsol.
"We don't have a lot of exposure to the periphery but I can
see that their economies are improving," said Williams.
In spite of a hit to equity markets this week from Ukraine,
European stock markets have maintained their upwards trajectory
from last year, with the FTSEurofirst 300 up by around 2 percent
after having risen 16 percent in 2013.
Russia has effectively occupied Ukraine's Crimea region in
the wake of the toppling in Kiev of the former pro-Moscow
Ukrainian President Viktor Yanukovich.
German sportswear group Adidas fell 2.9 percent
in heavy volumes on Wednesday after warning that its 2014
results would take a significant hit from weakening
emerging-market currencies such as Russia's rouble.
However, many investors remain confident that the Ukraine
situation will gradually de-escalate, with Russia set to discuss
the situation with the United States on Wednesday.
"I would expect an eventual political solution, which is why
the markets are taking it in their stride for now," said Takis
Christodoulopoulos, an analyst at hedge fund Toscafund.