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* FTSEurofirst 300 ends flat after touching two-week highs
* Fiat Chrysler leads auto sector lower after downgrade
* Taylor Wimpey, Vodafone surge after update
* Greek banks rise after upbeat UBS note
By Atul Prakash and Danilo Masoni
LONDON/MILAN, May 17 European shares steadied on
Tuesday with gains in companies such as Taylor Wimpey and
Vodafone following encouraging updates and a rally in
mining companies offset by a weaker auto sector.
The pan-European FTSEurofirst 300 ended little
changed after earlier rising to its highest since early May. The
index, which closed flat also in the previous session, is still
down over 8 percent this year.
Taylor Wimpey advanced 4.7 percent after the housebuilder
announced a new special payout, promising investors about 1.3
billion pounds over three years, underpinned by strong demand
for property in Britain.
Vodafone rose 1.5 percent after the world’s second-largest
mobile phone operator said its earnings growth would accelerate
this year. The group said a programme to improve its networks
had boosted demand in Europe and helped it to return to
underlying growth in 2016 revenue and core earnings for the
first time since 2008.
“Demand for data continues to grow strongly…and Vodafone
have invested heavily in infrastructure to capitalise on this,”
Steve Clayton, head of equity research at Hargreaves Lansdown,
The STOXX Europe 600 Auto index fell 2.7 percent,
making it the top sectoral loser. Fiat Chrysler (FCA)
fell 6.7 percent after Exane BNP Paribas downgrades the stock to
“After 7 years of global auto expansion – and unprecedented
NAFTA returns – FCA has done too little to insure itself against
a downturn in our view. As the end of a lease driven bubble
approaches, and M&A optionality fades, FCA looks out of time,”
it said in a note.
Greek banks advanced 3.7 percent, with UBS
turning more positive on the Greek banking sector arguing that
signs of progress in talks with Greece’s lenders meant the
sector could rebound.
“The starting point is very challenging and risks abound,
but we see a fundamental investment case and valuations suggest
upside potential,” UBS analysts said, referring to Greek banks.
The STOXX Europe 600 Basic Resources index rose 1.9
percent, as copper prices were supported by a softer dollar and
firm oil, but remained within sight of recent lows brought about
by a resurfacing of worries over demand growth in top consumer
Today’s European research round-up
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Mike Dolan, Markets Editor EMEA.
(Additional reporting by Sudip Kar-Gupta; Editing by Alison
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