* FTSEurofirst 300 up 0.1 pct, Euro STOXX 50 up 0.5 pct
* Insurer Aviva slumps 14 pct after slashing dividend
* Medium-term outlook bullish, more caution in short term
* Aggreko and Carrefour rise after reassuring results
By Sudip Kar-Gupta
LONDON, March 7 European shares edged up in
early trade on Thursday, pushing major indexes to near
multi-year highs and with investors forecasting more gains in
the medium term.
Gains across the market were expected to be more limited in
the short term with the market awaiting a European Central Bank
(ECB) meeting later in the day for clues on any ECB plans to
help the weak economy and the bank's comments on Italy's
British insurer Aviva bucked the market, slumping 14
percent after slashing its dividend and was one of the biggest
drags on the FTSEurofirst 300 index.
The pan-European FTSEurofirst 300, which had
reached a 4-1/2 year intraday high of 1,193.35 points on
Wednesday, rose 0.1 percent to 1,187.16 points.
The euro zone's blue-chip Euro STOXX 50 index
advanced 0.5 percent to 2,692.02 points. And Germany's DAX
rose 0.3 percent to 7,940.49 points, nearing five-year
highs reached earlier this week.
British power company Aggreko and French
supermarket retailer Carrefour led gainers on the
FTSEurofirst 300 after posting reassuring results, with Aggreko
shares surging 9.6 percent while Carrefour rose 5.5 percent.
Some investors expressed concerns over Europe's weak economy
and a political stalemate in Italy, which has reignited fears
over the ability of Italy and Spain to come up with reforms to
tackle their debt problems and economic recession.
Strategists at investment firm Brown Advisory, which manages
around $33 billion in client assets, said they were reducing
their exposure to European shares.
"Brown Advisory is reducing exposure to European equities
because it is sceptical about a continued run in 2013," said
Brown Advisory asset allocation analyst Taylor Graff.
"Despite the recent rally, Brown still sees large
macroeconomic risks, major fundamental growth obstacles and
deteriorating stock valuations in comparison to the U.S. and
other emerging markets," he added.
UPWARDS TREND INTACT
Clairinvest fund manager Ion-Marc Valahu said the broader
upwards trend for European equity markets remained intact, and
despite Aviva's dividend cut, solid results from the majority of
Europe's top companies had bolstered investor confidence towards
Data from Thomson Reuters Starmine shows that 59 percent of
companies on the STOXX Europe 600 index have reported
results that either beat or met market expectations.
Valahu, whose main European fund is "overweight" on
financial stocks, said expectations of a gradual recovery in the
global economy and plans by central banks to keep supporting
markets meant traders were increasingly having to unwind "short"
bets that had forecast a fall in the market.
"It feels as if nothing can take this market down. People
have given up on being 'short' because the market is moving away
from them," he said.