* FTSEurofirst 300 and Euro STOXX rise 0.5 pct
* Markets recover after two straight days of losses
* Inditex and Kabel Deutschland among top gainers
* Central bank concerns still weigh on sentiment
By Sudip Kar-Gupta
LONDON, June 12 (Reuters) - Gains at German media group Kabel Deutschland and clothing retailer Inditex enabled European shares to rebound higher on Wednesday after two straight days of losses.
However, several traders said they saw little room for bigger near-term gains due to persistent concerns that central banks’ support for financial markets was likely to wane.
The pan-European FTSEurofirst 300 index, which fell to its lowest level since late April on Tuesday, was up by 0.5 percent at 1,185.10 points in mid-session trading.
The euro zone’s blue-chip Euro STOXX 50 index also rose by 0.5 percent to 2,696.75 points.
Inditex rose 3.2 percent after it reassured investors it expected a stable 2013 margin, while Kabel Deutschland soared 8.4 percent after receiving a preliminary bid approach from UK telecoms group Vodafone.
But Logic Investments director of strategy Peter Rice said the market rise was a “recovery rally” rather than anything more fundamental. “Realistically, we’re looking rangebound,” he said.
Rice saw Germany’s DAX, which hit record highs in May before edging back, trading in a range of 8,050-8,355 points while uncertainty remains over the future monetary policy of major central banks such as the U.S Federal Reserve.
Rice said he would “go long” to bet on further gains on the Euro STOXX 50 if it rose and held above the 2,700 point level, but would otherwise adopt a neutral position on markets.
Many investors are reluctant to bet on near-term gains due to prospects that markets may fall further on expectations of a tapering in the Fed’s economic stimulus measures, which have helped fuel this year’s steep global equity rally.
“The Fed tapering is certainly on the agenda. The market is starting to realise that the stimulus is likely to come to a halt at some point,” said Rice.
The FTSEurofirst 300 is up some 5 percent since the start of 2013, although it has fallen 6 percent after hitting a 2013 intraday peak of 1,258.09 points in late May.
Hendrik Klein, head of investment firm Da Vinci Invest AG, was bullish on equities over the longer-term but more cautious in the near-term. “I‘m still long-term bullish but in the near term, I‘m more on the ‘short’ side,” he said.