European shares rebound on firmer autos, utilities

* FTSEurofirst 300 up 0.3 pct after closing lower on Friday

* Automakers, utilities feature among biggest gainers

* Caution due to geopolitical tension, euro zone debt crisis

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Dec 20 (BestGrowthStock) – European equities bounced back on
Monday in thin year-end trading, helped by firmer utilities and
automobile shares, though tensions in the Korean peninsula and
the lingering euro zone debt crisis capped gains.

At 0913 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.3 percent at 1,129.85 points after
falling 0.4 percent on Friday. The Euro STOXX 50 (.STOXX50E: )
blue chip index rose 0.5 percent to 2,835.67 points.

The Euro STOXX 50 faced tough resistance at 2,837.89 — its
38.2 percent Fibonacci retracement of a major fall from a high
in 2007 to a trough in 2009.

Automakers topped the gainers’ list on hopes that a global
economic recovery will boost demand for vehicles. The STOXX
Europe 600 Automobiles & Parts (.SXAP: ) index rose 1.3 percent,
while Volkswagen AG (VOWG_p.DE: ) was up 2 percent.

“For most of the traders and hedge funds, the year is over.
There is not too much volume and you are not going to see much
direction either way,” said Koen De Leus, strategist at KBC
Securities, in Brussels.

“Macroeconomic figures were lately on the upside. The market
is overly bullish and overbought. If momentum in economic data
continues to be good, then the market can stay around the
current levels.”

Utility shares were also in demand, with the European sector
index (.SX6P: ) rising 0.7 percent and National Grid (NG.L: )
gaining 1.6 percent.

CAUTIOUS TRADE

But caution prevailed as despite threats of war by
Pyongyang, South Korea launched live firing drills on a disputed
island after an emergency U.N. Security Council meeting failed
to agree on how to defuse the crisis. [ID:nL3E6NK01M]

Concerns about the euro zone debt crisis also persisted. The
European Central Bank has expressed “serious concerns” that
Ireland’s bailout package could affect the institution’s
liquidity operations in the euro zone. [ID:nLDE6BI0HC]

Energy shares advanced as crude oil prices (CLc1: ) rose as
forecasts for freezing temperatures in Europe and the U.S.
Northeast this week looked to boost heating fuel demand. The
STOXX Europe 600 basic resources index (.SXPP: ) was up 0.5
percent, while Total (TOTF.PA: ) gained 0.9 percent.

Among individual movers, Abertis (ABE.MC: ) gained 3.2
percent. The Sunday Times reported without citing sources that
British private equity group CVC [CVC.UL] is putting together a
12 billion euros ($16 billion) takeover bid for the Spanish
infrastructure company.

Credit Agricole (CAGR.PA: ) fell 1.1 percent after the French
bank said fourth-quarter net profit will be hit by a charge of
about 1.25 billion euros as it reclassifies its 4.79 percent
stake in Italy’s Intesa SanPaolo (ISP.MI: ) as an asset for sale.

“Given that the probability of a recovery in the Intesa share
price is low in the current context, the new management of
Credit Agricole has undoubtedly preferred to register this
latent loss now rather than in June 2011,” CM-CIC Securities
analyst Pierre Chedeville said.
(Additional reporting by James Regan; Editing by Jon
Loades-Carter)

European shares rebound on firmer autos, utilities