European stocks rise in thin trade, led by miners

* FTSEurofirst 300 up 1.1 percent

* Euro STOXX 50 back above key retracement level

* Greek stocks dragged by credit downgrade fears

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

By Blaise Robinson

PARIS, Dec 20 (BestGrowthStock) – European stocks were 1.1 percent
higher in seasonally quiet trade early on Monday afternoon, with
a key index hitting a two-year high led by mining shares on the
back of buoyant metal prices.

At 1230 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 1.1 percent at 1,138.69 points, a level
not seen since Sept. 22, 2008 — a few days after the collapse
of Wall Street firm Lehman Brothers.

Heavyweight metal and mining stocks led the rally on Monday,
with Antofagasta (ANTO.L: ) up 1.6 percent and ArcelorMittal
(ISPA.AS: ) up 1.2 percent.

The STOXX basic resources index (.SXPP: ), which was up 1.2
percent on Monday, has gained 26 percent so far in 2010.

The euro zone’s blue-chip Euro STOXX 50 (.STOXX50E: ) index
was up 1.4 percent at 2,862.33, to move above the 38.2 percent
Fibonacci retracement of its drop to a 2009 low from a 2007
high. Next key resistance was around 2,867, the high hit a week
ago.

“December’s rally is almost done and the market is somewhat
overbought on the short term but it does not mean the bullish
trend is over,” said Vincent Ganne, technical analyst at IG
Markets, in Paris.

“The euro is lower today versus the dollar, but the chart
shows it is pretty neutral at this point, so no big impact on
European equities.”

The euro struggled against the dollar on Monday following a
meeting of European leaders at the end of which there were no
further aggressive measures to tackle the euro zone debt crisis.
The euro managed to stay above its 200-day moving average, a
positive signal.

Over the past six months, the euro and the Euro STOXX 50
have had a strong positive correlation.

GREEK STOCKS’ DISMAL YEAR

Greek stocks bucked the trend, with Alpha Bank (ACBr.AT: )
down 3.4 percent and National Bank (NBGr.AT: ) down 4.3 percent,
hit by fears of a rating downgrade on the country’s debt,
traders said.
Greece’s ATG benchmark index (.ATG: ) has lost 34 percent so
far this year, while the country’s banking index (.FTATBNK: ) has
roughly halved.

Around Europe, Britain’s FTSE 100 index (.FTSE: ) was up 0.7
percent, Germany’s DAX index (.GDAXI: ) up 1.2 percent, and
France’s CAC 40 (.FCHI: ) up 1.2 percent.

“The market is nicely climbing, and investment themes such
as exposure to emerging markets are still intact going into the
next year,” said David Thebault, head of quantitative sales
trading, at Global Equities, in Paris.

“But it will certainly remain a trader’s market, highly
tactical, with a wide trading range that will offer good buying
opportunities on the dips.”
(Additional reporting by Ingrid Melander in Athens; Editing by
Dan Lalor)

European stocks rise in thin trade, led by miners