Europe shares bounce back, lifted by miners, autos

* FTSEurofirst 300 rises 1.4 pct after Tuesday’s 7-week low

* Miners among top gainers; China factory output data helps

* Retailers slip; Carrefour falls 7 pct after cuts forecast

By Atul Prakash

LONDON, Dec 1 (BestGrowthStock) – European shares rebounded from the
previous session’s seven-week low on Wednesday as strong factory
output data from China, one of the world’s top metals consumers,
boosted miners, while carmakers advanced on positive outlook.

But analysts said that the bounce could be short-lived and
concerns over the euro zone debt crisis could soon resurface.
The market’s gains were also capped by weaker food and retail
shares after Carrefour (CARR.PA: ) cut its 2010 profit forecast.

Carrefour shares were down 7 percent after hitting a
one-year low, while the STOXX Europe 600 Retail index (.SXRP: )
was down 0.3 percent.

At 1232 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 1.4 percent at 1,081.64 points, while the
Euro STOXX 50 (.STOXX50E: ) rose 1.8 percent, moving back above a
key support level — the 38.2 percent Fibonacci retracement of
the index’s drop from an April high to a May low.

“Today is a good day but I would not bet on this going to
last for too long. We still have considerable uncertainties
around the sovereign credit crisis and this will, on and off,
again spook the market,” said Klaus Wiener, head of research at
Generali Investments in Cologne.

“We have a macroeconomic picture which is fairly decent. All
we have to come to terms with is how the credit crisis evolve
and here we see that the issue is likely to linger because some
of the key questions will not be resolved quickly.”

Washington is sending a top U.S. Treasury envoy to Europe
and G20 officials are discussing the turmoil in a conference
call, a day after investors pushed the risk premiums on Spanish
and Italian government debt to new highs. Standard & Poor’s
warned on Tuesday it could cut Portugal’s credit ratings.

The stock market was led higher by stronger miners, with the
STOXX Europe basic resources index (.SXPP: ) up 2.3 percent on
firmer metals after figures showed China’s official purchasing
managers’ index (PMI) rose to a seven-month high in November.

BHP Billiton (BLT.L: ), Rio Tinto (RIO.L: ) and Xstrata (XTA.L: )
gained 2.4 to 3.9 percent.

TECHNICAL BOUNCE

Analysts said the market got support from technical buying
after shares moved closer to an oversold territory.

“We’re getting a technical rebound. A number of indicators
showed the indexes as ‘oversold’, and some investors have
started looking for bargains. But we’re keeping a close eye on
bond yield spreads to see if this stock rebound has legs,” said
Harry Sebag, head of sales trading at Saxo Banque.

The FTSEurofirst index’s relative strength index fell below
40 on Tuesday before slightly recovering on Wednesday. A move
towards 30 is an indication that an asset may be getting
oversold, while a level of 70 signals overbought conditions.

Banks also gained, with the sector index (.SX7P: ) rising 2.4
percent. Banco Santander (SAN.MC: ), Societe Generale (SOGN.PA: )
and BBVA (BBVA.MC: ) added 4.2 to 5.9 percent.

Auto makers gained, helped by an upbeat Nomura note saying
the continent’s market should be “back in the black in 2011”.
Renault (RENA.PA: ) gained 3.6 percent and BMW (BMWG.DE: ) rose 3.6
percent.

Across Europe, Britain’s FTSE 100 (.FTSE: ), Germany’s DAX
(.GDAXI: ) and France’s CAC 40 (.FCHI: ) rose 1.2 to 1.5 percent,
while the Thomson Reuters Peripheral Eurozone Countries Index
(.TRXFLDPIPU: ) was up 2.9 percent.
(Additional reporting by Blaise Robinson in Paris; Editing by
Louise Heavens)

Europe shares bounce back, lifted by miners, autos