* FTSEurofirst 300 flat
* Earlier losses spark buy on dip interest
* Autos cheered by car, tyre sales data
By Toni Vorobyova
LONDON, May 17 European shares held near
multi-year highs in volatile trade on Friday, with some
investors using early weakness as a buying opportunity and with
carmakers cheered by signs of a revival in domestic sales.
The STOXX Europe 600 auto sector added 2.4 percent
after data showed Europe's car market growing for the first time
in 1-1/2 years in April.
Adding to the bullish picture, Michelin said tyre
sales to automakers rose 3 percent in April in Europe, a sharp
contrast with double-digit drops in monthly sales recorded in
the first three months of the year. Shares in the French-listed
company added 3.3 percent
Gains in autos, coupled with a rise in U.S. stock futures
helped the broader European market regain some poise
after talk by some U.S. policymakers about the possible future
removal of monetary stimulus spooked investors.
The FTSEurofirst 300 was flat at 1,245.80 points by 1017
GMT, off a session low of 1,239.55 and in sight of a five-year
high of 1,247.57 set in the previous session.
"The market doesn't want to go down ... Every time the
market goes back, we have long funds going in to buy, and we see
it in all the stocks we cover," said Martin Tormey, head of
equity trading at Goodbody Stockbrokers.
The EuroSTOXX 50 index of euro zone blue chips was up 0.3
percent at 2,813.90 points.
The monthly options expiry added to volatility on Friday,
with the EuroSTOXX 50 breaking above the 2,800 mark - home to a
large chunk of calls - in time for the 1000 GMT cut off. The
vast majority of May puts are out of the money, potentially
discouraging investors from rolling them over and thus leaving
the market more exposed to any downside move.
The rally which has seen European equities gain 9 percent in
the past month alone has largely been fuelled by central bank
stimulus. Occasional hawkish comments aside, analysts said, weak
data means this is likely to remain in place for some time.
"I think they try to prepare the market for an exit strategy
but not ... soon," said Benoit Peloille, strategist at Natixis.
"Guidance is clear, they will not exit monetary stimulus if
unemployment rate does not decrease below 6.5 percent. And if it
is the case, it will be a good news fundamentally because it
means that environment improved."