* Media and utility sectors outperform as markets rise
* FTSEurofirst 300 up 0.5 pct, Euro STOXX up 0.6 pct
* Central bank support lifts equity markets
* Italy worries could cause March pullback
By Sudip Kar-Gupta
LONDON, Feb 28 European shares rose on Thursday,
with utility and media stocks among the top gainers, as fresh
signs of central bank support enabled equities to recoup earlier
losses caused by Italy's political deadlock.
The pan-European FTSEurofirst 300 index rose 0.5
percent to 1,166.82 points, while the euro zone's blue-chip Euro
STOXX 50 index advanced 0.6 percent to 2,626.44
European stock markets fell earlier this week after the
election in Italy produced a stalemate, reigniting worries over
Italy's ability to undertake reforms for its economy, which has
been hit by the euro zone's sovereign debt crisis.
Those worries were offset by fresh pledges by the European
Central Bank and U.S. Federal Reserve this week to continue with
steps to inject liquidity into markets, which have propped up
the global economy and equities.
Reassuring results from leading European companies also
boosted equities on Thursday.
The STOXX Europe 600 Utilities Index rose 1.1
percent to outperform other sectors, with French utility GDF
Suez gaining 1.4 percent as it stuck to its 2013
European utility stocks are often favoured in times of
market uncertainty for their stable profits and dividends, with
UK utility Centrica posting a 9 percent profit rise
earlier this week.
"The utilities are looking pretty good today," said Berkeley
Futures associate director Richard Griffiths.
Griffiths said that despite worries over Italy in the
backdrop, his firm had sold more "call" options to investors
betting on further market gains, than "put" options betting on
more market falls.
Griffiths said investors had bought "call" options on
Germany's DAX equity index that were due to expire in
April with a strike price of 8,000 points - implying a 3 percent
rise over the next month.
"We're much more active on the 'calls' side," he said.
RANGEBOUND MARKET IN MARCH?
The STOXX Europe 600 Media Index also outperformed
other sectors with a 1.2 percent gain, as publishing company
Reed Elsevier reported it expected more growth
Although the longer-term outlook for equities remains
bullish, due to expectations of central bank support measures
and a gradual recovery in the global economy, others expected
volatile stock markets in March.
They added Italy remained a concern, while U.S. budget cuts
due to kick at the start of next month could also prevent equity
markets from making much headway in March.
Central Markets chief strategist Richard Perry said there
was still a risk of a 4 percent fall on equity markets this
month, which could precede any later rally in April.
"I think markets will be choppy and rangebound this coming
month. I don't think it will break much higher, and if anything
it could break lower," he said.
William Beverley, head of macroeconomic research at wealth
management firm Iveagh, also said there was a risk of a
near-term pullback. "There is still potential for a little bit
more correction, perhaps up to 5 percent in global markets in a
worst case scenario," he said.