* FTSEurofirst 300 up 0.5 pct, Euro STOXX 50 up 0.8 pct
* STM leads gainers as CEO guides for strong growth in
* Sell indexes, buy volatility - Altana Wealth
By Francesco Canepa
LONDON, June 4 European shares stages a modest
rebound on Tuesday, led by chip-makers after confident outlook
comments from STMicroelectronics raised optimism on the
STMicroelectronics rose 5.2 percent and peer Infineon
rose 2.6 percent after STM's chief executive, Carlo
Bozotti, told the newspaper Le Figaro it expected growth of 5 to
10 percent this year.
"This guidance confirms the company's positive momentum and
signals a recovery in the sector, which brings more visibility,"
a Paris trader said.
STM led the pan-European FTSEurofirst 300 index,
which was up 0.5 percent at 1,213.62 points, while the euro zone
Euro STOXX 50 index was up 0.7 percent at 2,766.83 points after
closing at a three-week low on Monday.
The Euro STOXX 50 has fallen roughly 2.7 percent from a
nearly two-year high hit in late May as investors fretted that
the U.S. Federal Reserve may taper off its monetary stimulus
programme, which has helped drive a 35 percent rally in the past
Trading has become more volatile in the last couple of
weeks, with key indices recording daily moves of more than 1
percent, and the VSTOXX index of implied volatility,
regarded as a gauge of investor fears of future swings, hitting
a 6-week high on Monday.
"The markets are very extended and very nervous," said Lee
Robinson, founder of the hedge fund Altana Wealth.
"The price action on a lot of assets has been violent. Could
you see a 5-percent-down day on the FTSE or the Euro STOXX in
the next four weeks? It's not inconceivable."
In this context, Ronnie Chopra, a strategist at TradeNext,
recommended hedging long positions in single European stocks
with "shorts" on indices such as France's CAC 40 and
Short sellers borrow a security and sell it, betting they
will be able to buy it back at a lower price before returning it
to the lender, pocketing the difference.
Respectively 63 percent and 58 percent of IG's clients with
positions on the Dax or the CAC were short the indices, data
from the spread betting firm showed.