European stocks near 1-mth closing high; miners up

* FTSEurofirst 300 rises 0.5 pct, eye 1-month closing high

* Market breaks through key technical levels

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

By Brian Gorman

LONDON, April 8 (Reuters) – European shares headed for their
highest close in more than a month on Friday, with miners up as
metals prices were boosted by an improving economic outlook and
a weaker dollar.

At 1058 GMT, the FTSEurofirst 300 index of top European
shares was up 0.5 percent at 1,150.11 points, on course for the
highest close since early March and a third weekly gain.

The European benchmark is up more than 78 percent from its
lifetime low of March, 2009.

Strategists said monetary stimulus, such as the U.S. Federal
Reserve’s quantitative easing was a key factor in continuing to
boost markets. It was helping investors look past a host of
negatives such as Japan’s nuclear crisis, tension in the Arab
world, and the euro zone’s debt crisis and rising interest
rates.

“The resilience the market is showing against a hostile
background is quite remarkable,” said Richard Jeffrey chief
investment officer at Cazenove Capital Management, which has 15
billion pounds under management.

“In some respects, it’s an indication of the liquidity in
the international finance system through quantitative easing. It
would appear that is a more powerful force than the ECB
tightening.”

However, the Fed is likely to end its $600 billion
bond-buying programme within the next two or three months and it
may raise interest rates. Jeffrey said markets might then
“hesitate”.

Gold struck a record high on Friday, and silver crossed $40
an ounce for the first time since 1980, as a weaker dollar and
concerns about inflation sent investors piling into precious
metals. [ID:nLDE7351ZB]

Base metals also gained sharply. Miners to gain included
Anglo American (AAL.L: Quote, Profile, Research), BHP Billiton (BLT.L: Quote, Profile, Research) and Fresnillo
(FRES.L: Quote, Profile, Research), up between 2.1 and 2.7 percent.
Insurance stocks were also among the top gainers on Friday,
with AXA (AXAF.PA: Quote, Profile, Research), Swiss Life (SLHN.VX: Quote, Profile, Research), Old Mutual (OML.L: Quote, Profile, Research) and
Aviva (AV.L: Quote, Profile, Research), up between 1.7 and 3.3 percent.
In a note to clients, UniCredit recommended investors to
take long positions on European insurance stocks (.SXIP: Quote, Profile, Research) and
short retailers’ stocks (.SXRP: Quote, Profile, Research) as the ECB’s rate rise will be
supportive to the insurance sector while crimping consumer
spending.

TNT FALLS

Among individual shares, Dutch mail company TNT (TNT.AS: Quote, Profile, Research)
fell 10 percent after saying it will push ahead with spinning
off its express unit, despite changing the outlook for the unit
due to oil prices, political unrest and natural disasters.

Technical indicators were positive, with the pan-European
index having broken through key levels. The index rose above its
50-day moving average, and is also above the 61.8 percent
Fibonacci retracement level of its fall to its lowest point in
2011, in March, from a February high.

“A bullish continuation pattern….is confirmed,” said
Philippe Delabarre, technical analyst, at Trading Central, in
Paris, writing about the Stoxx 50 (.STOXX50: Quote, Profile, Research), which rose 0.4
percent to 2,649.46 points. He gave a short-term target of
2,920.

As expected, the European Central Bank raised interest rates
for the first time since the 2008 financial crisis on Thursday,
and market expectations of more hikes this year sent the euro to
a 15-month high against the dollar, boosting foreign investors’
appetite for the region’s stocks as they seek exposure to the
rallying currency.

“The ECB’s move is sort of removing the punch bowl, which is
a good thing at this point. The message is that overall, the
European economy has been improving,” a Paris-based trader said.

Citigroup said in a note that global growth “should support
double digit earnings growth for European companies.”

It added: “We forecast double-digit returns for equities as
markets track expected earnings growth in 2011. Stay bullish.
Absolute valuations are around average, while equities continue
to look attractive relative to bonds in a more inflationary
world.”

(Additional reporting by Blaise Robinson, Editing by Erica
Billingham)

European stocks near 1-mth closing high; miners up