European shares recover from losses as euro weakens

  • Reuters
  • Stock Market News
European shares recover from losses as euro weakens
Credit: © Reuters.

* FTSEurofirst 300 down 0.2 pct, Euro STOXX 50 down 0.2 pct

* Vodafone rises after strong results, Vallourec drops

* Portuguese stocks underperform on political uncertainty (Adds quote, detail)

By Danilo Masoni and Alistair Smout

MILAN/LONDON, Nov 10 (Reuters) - European shares turned higher on Tuesday in volatile trade, supported by a weak euro even as losses among commodity stocks and political uncertainty in Portugal weighed.

Vodafone VOD.L rose almost 5 percent after the British phone group reported a better-than-expected acceleration in second-quarter revenue growth, helping it nudge its annual expectations towards the top of its guidance.

Experian EXPN.L was the top riser on the FTSEurofirst 300 .FTEU3 , up 6.7 percent after it beat first half earnings expectations.

In all, 50 percent of STOXX 600 .STOXX companies that have reported earnings have beaten or met expectations, Thomson Reuters Starmine data showed.

The pan-European FTSEurofirst 300 was up 0.2 percent, with the euro zone's blue-chip Euro STOXX 50 index .STOXX50E up the same amount.

The index turned higher after the euro hit a 7-month low against the dollar, boosting stocks, especially exporters.

It had been under pressure from weakness in commodity stocks, which remained among the the day's top fallers.

The STOXX 600 Basic Resources index .SXPP was down 0.4 percent, off its lows, with a firmer dollar and prolonged economic weakness in top metals consumer China keeping copper near a six-year low.

"The central tenet of what's going on, especially in commodity prices and the general slowdown in global growth, is that for a long time, we have been relying on China," said Alastair Irvine, product specialist for Jupiter's Independent Funds Team.

"They are trying to rebalance the economy... but it's something that's going to take a long time."

Construction sector stocks .SXOP were also weaker, with French construction and concessions company Eiffage FOUG.PA falling more than 3 percent after weak domestic business weighed on its quarterly results.

Roberto Lottici, a fund manager at Italy's Ifigest, said expectations of central bank support were providing a floor for European equities but recommended investors pick out individual stocks and consolidate gains as the year end approaches.

Vallourec VLLP.PA fell more than 9 percent after reporting a third-quarter loss against a backdrop of falling demand from its oil and gas customers and said it did not expect market conditions to improve in the short-term.

Portugal's PSI 20 .PSI20 index fell 0.1 percent but remained off its lows. It is down over 4 percent this week. Leftwing parties formalised a deal to oust a minority centre-right government on Tuesday.

While the prospect of a leftist government has unnerved investors in recent days, the index rallied off lows after the motion presented to parliament would respect the country's international commitments and budget consolidation. (Editing by Jon Boyle)

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