April 25, 2013 / 11:11 AM / 4 years ago

Volkswagen, Vodafone help lift European equities

3 Min Read

* FTSEurofirst up 0.1 pct, Euro STOXX 50 down 0.5 pct
    * DAX rises on German economy boost and VW gains
    * Expectations of ECB stimulus still supporting equities
    * Vodafone up on Verizon Wireless deal prospects

    By Sudip Kar-Gupta
    LONDON, April 25 (Reuters) - European shares edged up on
Thursday, with the benchmark FTSEurofirst 300 index rising for a
fifth straight session, helped by gains in car maker Volkswagen
 and telecoms group Vodafone.
    The index was up 0.1 percent at 1,192.95 points by
mid-session trade and has now gained 5 percent since the start
of 2013.
    The euro zone's blue-chip Euro STOXX 50 index 
fell 0.5 percent to 2,689.62 points, but was supported by a
slight rise in Germany's DAX equity index.
    German carmaker Volkswagen and an upgrade of the
German government's growth forecast underpinned the DAX, which
was up 0.1 percent at 7,764.60 points. 
    Volkswagen shares jumped 1.4 percent after the company said
it was hoping for a second-half recovery. 
    JN Financial investment manager Ed Smyth said he had bought
the DAX index earlier this month at 7,470 points on expectations
it could rise to 7,800 points by the start of May.
    Traders and investors said that expectations of new stimulus
measures from the European Central Bank (ECB) to try and shore
up the euro zone economy, such as a possible rate cut next week,
were also supporting equities.
    "We think that you are not going to see what you have seen
in previous years, where April has been the peak. This time
around, equity levels will be supported very well," said Mislav
Matejka, chief European equity strategist at JP Morgan.
    
    VODAFONE RISES
    Vodafone advanced 2.3 percent on fresh signs that U.S.
partner Verizon may move to take full control of the
Verizon Wireless venture it runs with Vodafone.
    Two people familiar with the matter told Reuters that
Verizon had hired advisers to prepare a possible $100 billion
cash and stock bid to take full control of Verizon Wireless from
Vodafone. 
    Vodafone's increase offset losses in shares of other major
European companies after weak corporate results that led some
investors to take a more cautious view on European equities.
    Spanish bank Santander dropped 4 percent to make it
the worst-performing FTSEurofirst 300 stock after posting lower
profits, while consumer products group Unilever fell
2.1 percent after posting weaker-than-forecast sales growth.
  
    "We feel inclined to temper our enthusiasm for European
equities," said Ashish Misra, head of investment policy and
research at Lloyds TSB Private Banking.

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