(ADVISORY- Reuters plans to replace intra-day European and UK stock market reports with a Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets for site in development. See the bottom of the report for more details) Adds details, updates prices)
* FTSEurofirst 300 rebounds from Monday’s losses
* KBC and ING lifted by Goldman Sachs upgrade
* French group SEB rises after WMF acquisition
* Concerns remain over possible future U.S rate hikes
By Sudip Kar-Gupta
LONDON, May 24 (Reuters) - European shares rose on Tuesday, recovering from losses at the start of trading as firmer financial stocks lifted the region’s equity markets.
The pan-European FTSEurofirst 300 and STOXX 600 indexes were both up around 1 percent by 1024 GMT, rebounding from losses of a similar scale incurred on Monday.
The STOXX Europe 600 Banks Index outperformed with a 1.4 percent rise. KBC and ING both climbed after Goldman Sachs upgraded them both to “buy” from “neutral”.
Italian bank UniCredit also rose 2 percent ahead of a board meeting expected to formally approve the search for a new chief executive.
Shares in French household equipment manufacturer SEB surged 11.5 percent as investors welcomed SEB’s move to buy WMF, a German maker of coffee machines and silverware, from KKR in a 1.6 billion-euro deal.
Swiss drugmaker Galenica fell more than 6 percent, making it the biggest loser on the FTSEurofirst 300, as investors were disappointed by its decision to postpone a break up of the group.
Some traders remained sceptical about the market rebound, with concerns about the possibility of a U.S. interest rate increase in coming weeks having weighed on world stock markets over the last month.
In spite of Tuesday’s move higher, the FTSEurofirst remains down by around 4 percent over the last month.
“This is a bear market rally,” said Andreas Clenow, chief investment officer of ACIES Asset Management in Zurich, pointing to headwinds from future U.S. rate rises and slow global economic growth.
Clenow said he retained a short position on European equities, namely betting on future declines on that market.
Hantec Markets’ analyst Richard Perry also expected stock markets to stay choppy before Britain’s June 23 vote on membership of the European Union, and until investors got more clarity on the timing of any future U.S rate rises.
“I expect us to be in a sideways trend over the coming month, although the longer-term trend is still a downwards one,” said Perry.
Today’s European research round-up
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