* FTSEurofirst up 0.2 pct, CAC hits highest since 2008
* Aegon gains 4 pct, Vodafone rises 1.7 pct
* AXA shares slip after disappointing results
By Atul Prakash
LONDON, Feb 21 European shares edged higher in
cautious trading on Friday, with France's CAC 40 hitting
a 5-1/2-year peak as investors took their lead from gains on
Wall Street and in Asia after robust U.S. factory data.
At 1126 GMT, the FTSEurofirst 300 index of top
European shares was up 0.2 percent at 1,341.14 points after
rising as high as 1,345.26, the highest since late January. The
CAC reached its highest since 2008 and was also up 0.2 percent.
Wall Street's S&P 500 gained 0.6 percent on Thursday
and Japan's Nikkei rose almost 3 percent on Friday on
figures showing U.S. factory activity accelerated at its fastest
pace in four years in February, a bullish indicator after some
"It is a positive sign that the U.S. economy is improving,"
David Battersby, investment manager at Redmayne-Bentley, said.
"And if the economy is improving, then they will be sucking in
imports. Things are getting back on track.
"Look at the companies that are international brands and
have strong emerging market exposure because that's where, after
the recent fallout, we have value," he said, adding that
companies such as GlaxoSmithKline, Unilever and
Diageo were quite attractive.
Dutch insurer Aegon rose 4 percent to the top of
the FTSEurofirst 300's gainers' list, helped by an upgrade by
Raymond James to "strong buy" from "outperform", with the
brokerage saying a recent price decline provided a good entry
Vodafone gained 1.7 percent ahead of the completion
of the sale of its stake in Verizon Wireless to U.S. peer
Verizon. The deal will tee up an $84 billion payout in
cash and shares at the end of February, which many may look to
reinvest in stocks like Vodafone, analysts said.
"Certainly holders of Vodafone tend to be institutional and
will play the re-weight somewhat by the book. Re-investment back
into the Vodafone stub itself is certainly occurring apace,"
Monument Securities director Andy Ash said.
Bucking the trend, Europe's No. 2 insurer AXA fell
1.3 percent after posting a lower-than-expected quarterly
profit, while Kering, owner of the Yves Saint Laurent,
Bottega Veneta and Gucci brands, dropped 2.9 percent after
reporting a sharply lower full-year profit.
Despite some soft results on Friday, data shows the earnings
season in Europe has been relatively positive so far.
About 60 percent of STOXX 600 companies have
reported results, of which 59 percent have met or beaten profit
forecasts, with net profits rising 1.2 percent year-over-year on
average, Thomson Reuters Starmine data shows.
"You want sectors which are benefiting from cash-flow
momentum, earnings momentum and are not particularly expensive.
The media sector ticks some of those boxes, but the sectors that
work for us are mining, utilities and healthcare," Graham
Bishop, senior equity strategist at Exane BNP Paribas, said.
Overall, investors remained positive on European stocks,
with figures showing further brisk inflows into the region.
A poll by Thomson Reuters Lipper of 102 U.S.-based funds
invested in European equities shows the funds added $502 million
into European equities in the seven-day period to Feb. 19, a
34th straight week of net inflows - marking the longest streak
of weekly inflows since Lipper started to monitor flows in 1992.
"The stock market has recovered very well and it is no
longer cheap, but I think there is still value to be had,"
Battersby of Redmayne-Bentley said.
"It's like climbing a mountain really - the closer you get
to the top, the windier it's going to become."
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Today's European research round-up