* FTSEurofirst 300 flat
* Germany's Dax rebounds after strong trade data
* Unicredit jumps as investors welcome clean-up
By Tricia Wright
LONDON, March 11 German shares rose on Tuesday,
outperforming European stocks more broadly, as strong trade
data from the region's largest economy revived investor appetite
for the DAX index.
Wider market sentiment was still undermined by the crisis in
Ukraine, where confrontation between Kiev and Moscow showed no
sign of easing.
Frankfurt's blue-chip DAX index posted a 0.5
percent gain after Germany reported stronger-than-expected
exports and imports in January.
The DAX had fallen 2.9 percent in the previous two sessions,
dragged down by worries about Ukraine and by disappointing
Chinese trade data.
"The German trade figures were very solid and do point to a
continuing recovery combined with an acceleration in growth in
2014," said Markus Huber, a senior sales trader at Peregrine &
Black. "Much will depend (on) how long the crisis in the Ukraine
will drag on and if harmful sanctions and counter-sanctions will
be put in place."
Europe's broader FTSEurofirst 300 index closed flat
at 1,321.39 points.
Russia's intervention in Crimea has led to plans for a
referendum on March 16 on whether to secede from Ukraine and
join Russia. Those plans have provoked condemnation from Western
countries and the threat of international sanctions against
Veronika Pechlaner, who helps manage $13 billion of assets
at Ashburton Investments, felt comfortable buying on dips
presented by equity market volatility this year.
"Apart from obviously the eastern European markets reacting
(to the tensions in Ukraine), we've not seen peripheral credit
markets in Europe doing anything untowards ... which is
important for the European banking system," she said.
She noted that the fact any stock market weakness has been
relatively short-lived hints at underlying optimism that
equities will grind higher in 2014, though she advocates a
selective investment approach.
"In the long term we think Europe is on track ... but in the
very short term we have come a long way very quickly and while
we're still slightly overweight European equities, we're taking
a much closer look at that overweight."
In a global context, Ashburton favours European-listed
pharmaceutical stocks including Novartis, Roche
, and Sanofi on valuation grounds over their
Italy's FTSE MIB was up 0.4 percent after briefly
hitting a high not seen since mid 2011, led by UniCredit
after the bank reported a large 2013 net loss due to
writedowns of goodwill and bad loans but ruled out any need of a
UniCredit jumped 6.2 percent in robust volume - at 3-1/2
times its 90-day daily average against a more modest 1-1/2 times
seen on the FTSE MIB. Unicredit added the most points to the
Italian benchmark by some margin.
The FTSE MIB has risen 1 percent this week, also helped by
upbeat Italian industrial production data released on Monday,
which fuelled investor optimism that economies in southern
Europe were starting to recover.
Strategists at Credit Suisse reckon the rally in peripheral
Europe has further to run.
"Peripheral European equities can outperform core Europe by
about 20 percent, based on projected GDP growth differentials,"
they said in a note. "We continue to be overweight Italy."
Portugal's PSI index has surged 16.5 percent this
year, leading a rally in southern European indexes. Italy's FTSE
MIB has risen nearly 10 percent and Spain's IBEX
has gained 2.5 percent.
The PSI index advanced 1 percent on Tuesday to 7,641.78
points, its highest closing level since mid-2011, on optimism
about debt-laden Portugal's growth prospects.
The country's gross domestic product grew a revised 0.6
percent in the fourth quarter, accelerating from the previous
quarter as consumer demand rebounded and exports rose, data
Europe bourses in 2014:
Asset performance in 2014:
Today's European research round-up