* FTSEurofirst 300 up 0.5 pct, Euro STOXX 50 up 0.8 pct
* Traders bet on Cypriot bailout
* Charts show trend remains up - Trading Central
By Francesco Canepa
LONDON, March 20 European shares snapped a
three-day losing streak on Wednesday as investors bought back
battered stocks, betting that a funding crisis in Cyprus would
eventually be resolved.
Cypriot leaders held crisis talks on Wednesday to avert
financial meltdown after rejecting a deposit tax that was one of
the conditions for a 10 billion euro European Union bailout.
Finance Minister Michael Sarris was in Moscow, spurring
market speculation that Russia could step in with its own resuce
to safeguard Russian deposits in Cypriot banks.
Traders said the limited size of Cyprus's cash requirements
meant it was likely a compromise with international lenders
would be found, although they cautioned that equity markets
would probably remain volatile in the short term.
"In the grand scheme of things it's still a fairly small
amount," Ronnie Chopra, head of strategy at TradeNext said.
"People don't want to miss out on the rally. There is still
a lot of bullish sentiment especially from the U.S."
The pan-European FTSEurofirst 300 index was up 0.5
percent at 1,200.42 GMT.
European banks rose 0.5 percent after being among
the worst hit earlier this week, and Chopra recommended buying
Barclays, up 0.8 percent, after it fell below the 300
pence mark on Tuesday.
He warned, however, that sentiment could turn quickly if
news coming out of Cyprus suggested that the island was moving
closer to a default. He said if the euro fell back to a
four-month low of around $1.28, that would be a short-term sell
signal for shares.
In early European trade the single currency rose 0.2 percent
to $1,29, helping the euro zone blue-chip Euro STOXX50
index, to which it is highly correlated, rise 0.8
percent to 2,693.23.
Nicolas Suiffet, a technical analyst at Trading Central in
Paris, said this could be the right time to buy the index.
"The index has entered into a consolidation phase below (its
recent peak) at 2,750 but remains supported by a rising trend
line drawn from June's bottom and is now challenging the rising
20-day and 50-day simple moving averages," Suiffet said.
"The support at 2,660 (Tuesday's low) is likely to contain
any downward move in price."
He added momentum indicators were also supportive and a
rebound was likely from these levels, barring a break
below 2,547, the lower end of a bullish gap opened on in