* FTSEurofirst 300 up 0.8 pct, Euro STOXX 50 0.9 pct
* Good start to U.S. fiscal talks spur rebound
* Charts still bearish after support break
By Francesco Canepa
LONDON, Nov 19 European stocks rose early on
Monday, bouncing from a 3 1/2-month closing low, on signs
political negotiations to overcome a major fiscal policy
disagreement in the United States had begun well.
On Friday, leaders of the U.S. Senate and House said they
would be flexible in efforts to settle policy differences to
avert a $600 billion 'fiscal cliff' of tax hikes and spending
cuts, sparking a late rally on Wall Street.
"The rebound should be quite significant because there are
new hopes regarding the fiscal cliff and last week was quite
bad," a London-based trader said.
He expected France's CAC 40, up 1.2 percent at
3,379.82 points at 0916 GMT, to rise between 1 and 2 percent in
the very short term.
The broader FTSEurofirst 300 index was up 0.8
percent at 1,076.03 points, led by sectors that depend on
economic growth, such as auto stocks, basic resources
Miner Eurasian rose 3.9 percent, while lenders
Barclays and Commerzbank added 3.2 percent
and 3.1 percent, respectively.
The FTSEurofirst 300 index had fallen 2.7 percent in the
previous week as investors fretted about how the U.S. government
will avoid the fiscal cliff, which without a political agreement
kicks in early in the new year and could drag the U.S. economy
back into recession.
OUTLOOK STILL BEARISH
But traders warned market sentiment remained fragile and any
sign of political frictions in the United States and the euro
zone, where a meeting of finance ministers was set to discuss
aid to Greece on Tuesday, could sent shares into reverse.
Charts on the euro zone Euro STOXX 50 index, up
0.9 percent to 2,450 points, pointed to a still-negative outlook
after the index broke below its October 11 and November 9
bottoms last week, showing the selling pressure was piling up.
"The outlook is still bearish for the moment as last week we
broke the recent lows," Ouri Mimran, a technical strategist at
Natixis in Paris, said.
"I think the market is going to consolidate the up move
between June and September."
He said the Euro STOXX 50 could fall back to 2,394 points
and 2,263 points by the end of the year, corresponding to the
38.2 percent and 61.8 percent retracements of the June-September
27 percent rally.