* Portugal's PSI-20 market falls for 4th session
* FTSEurofirst 300 up 0.2 pct, steadying after Thursday drop
* Take more defensive approach - Sunrise Brokers strategist
* French telecom stocks boosted by merger moves
By Sudip Kar-Gupta
LONDON, May 16 Portugal's stock market fell for
a fourth straight session on Friday on concerns over the
country's economy, preventing broader European equity indexes
from making much progress.
The pan-European FTSEurofirst 300 index edged up
0.2 percent to 1,360.05 points in late session trading,
steadying after a 0.8 percent fall in the previous session that
had knocked the index down off 6-year highs.
The euro zone's Euro STOXX 50 index also rose
0.2 percent to 3,168.80 points but Lisbon's benchmark PSI-20
index fell 0.6 percent, following on from declines
earlier in the week including a 2.7 percent drop on Thursday.
Traders said the Lisbon market was hit by a 6 percent drop
in Portuguese bank Banco Espirito Santo after it
announced a discounted share issue to raise capital.
They added that ongoing concerns over the state of
Portugal's economy, after data on Thursday showed a shock 0.7
percent drop in gross domestic product, was further weighing on
the market, while Portuguese bonds also fell on
"We think there is always another euro zone crisis just
around the corner," HED Capital head Richard Edwards said.
TIME TO GO DEFENSIVE?
Other traders were more confident that the broader, upwards
trajectory of European stock markets remained intact.
The FTSEurofirst 300 remains up by nearly 3 percent since
the start of 2014, in spite of Thursday's pullback which was
triggered by data that showed a surprise contraction in the
economies of Portugal and Italy.
Merger activity has also supported European stock markets
this year, and French telecoms shares such as Iliad and
those of conglomerate Bouygues - which owns Bouygues
Telecom - rose on Friday on new signs of takeover activity in
Andreas Clenow, hedge fund trader and principal at ACIES
Asset Management, was unconcerned by Thursday's stock market
sell-off and was sticking with "long" positions betting on more
gradual gains for European equities.
"So far, I don't see enough damage to the uptrend," Clenow
However, Sunrise Brokers equity strategist Christopher
Mellor backed a more defensive approach to the equity markets
and favoured utility stocks - often preferred for their solid
dividend yields - to protect returns in case of any more
prolonged stock market declines.
"We are advocating a more defensive bias," he said.
(Additional reporting by Lionel Laurent; Editing by Alison