European shares close higher; miners support

By Harpreet Bhal

LONDON (BestGrowthStock) – European shares ended higher on Monday, with miners supported by strong metals prices offsetting weaker banks, while Vodafone (VOD.L: ) rose on reports of talks with U.S. partner Verizon (VZ.N: ) over dividend payments.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares closed 0.2 percent higher at 1,079.24 points.

The index posted its fourth weekly gain last week, and is on track to post a rise of more than 7 percent in March. Analysts expected equities to be well supported as the end of the first quarter looms, but they warn that some consolidation could be expected in the coming weeks following recent strong gains.

“We’re now getting to the point where people are saying we have had some terrific gains and maybe we have come a little bit too far too soon and we could see some consolidation,” said Joshua Raymond, market strategist at City Index.

Miners were in demand as metals prices rallied. Copper hit its highest in about three months as the dollar softened, while expectations of stronger demand from China lent additional support to prices.

Anglo American (AAL.L: ), Kazakhmys (KAZ.L: ), BHP Billiton (BLT.L: ), Xstrata (XTA.L: ) and Rio Tinto (RIO.L: ) added 0.5 to 3.2 percent.

Vodafone (VOD.L: ) was 3 percent higher after the Sunday Telegraph reported the firm was in holding talks with U.S. joint-venture partner Verizon Communication (VZ.N: ) over the payment of a dividend. A Vodafone spokesman declined comment.

Some concerns over sovereign debt problems eased as Greece launched a 7-year, 5 billion euro benchmark bond, returning to capital market for the first time since euro zone leaders agreed to give it a financial safety net.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: ) and France’s CAC 40 (.FCHI: ) advanced 0.1 to 0.6 percent.

BANKS PRESSURED

Banks were lower. Barclays (BARC.L: ), HSBC (HSBA.L: ), Lloyds Banking Group (LLOY.L: ) and Commerzbank (CBKG.DE: ) and Deutsche Bank (DBKGn.DE: ) shed 0.1 to 1.8 percent.

Allied Irish Banks (ALBK.I: ) and Bank of Ireland (BKIR.I: ) fell 19.6 and 10.4 percent, respectively, as the government prepared to take control of a much bigger chunk of the financial sector than initially planned.

In New York, Citigroup (C.N: ) dropped 3.5 percent after the U.S. Treasury said it plans to sell all of the 7.7 billion Citi shares it owns over the course of this year, unloading its stake in the banking group two years after rescuing it.

On the macroeconomic front, euro zone economic sentiment increased slightly more than expected in March and inflation expectations also rose, data showed on Monday.

U.S. consumer spending rose as expected in February for a fifth straight month, while stagnant incomes pushed savings to their lowest level since October 2008.

Focus later in the week is likely to turn to U.S. non-farm payrolls numbers, due on Friday, with economists forecasting the economy created about 190,000 jobs in March.

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(Editing by Rupert Winchester)

European shares close higher; miners support