Miners lead Europe shares higher ahead of US data

* FTSEurofirst 300 index gains 0.9 percent

* Miners gain; Vedanta up on bullish broker note

* Dixons slumps after profit warning

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

By Brian Gorman

LONDON, March 30 (Reuters) – European shares extended recent
gains on Wednesday, led by miners, with equity strategists
looking for a key labour market report to confirm that the U.S.
economy is continuing to recover.

At 1104 GMT, the pan-European FTSEurofirst 300 (.FTEU3: Quote, Profile, Research)
index of top shares was up 0.9 percent at 1,135.62 points and
had hit its highest in three weeks.

Investors will closely watch the U.S. ADP private-sector
employment report at 1215 GMT, showing the number of jobs
created, and giving clues about the all-important nonfarm
payroll data on Friday.

“What we want to see is companies shifting from temporary to
permanent hiring – that will tell us the recovery is ongoing.
We’re expecting a number of about 200,000,” said Philip
Isherwood, European equities strategist at Evolution Securities.

He said the possible early withdrawal of the Federal
Reserve’s stimulus measures was a sign that the U.S. recovery
was “strong and durable”, and added that the global recovery was
also intact, though “Japan is an air pocket”.

Among rising European shares, miners gained after Jiangxi
Copper Co. Ltd. said the metal’s top consmer China is expected
to use 10-12 percent more copper in 2011 and that prices for the
metal could reach new highs during the year. [ID:nL3E7EU1D3]

Vedanta (VED.L: Quote, Profile, Research) rose 5.3 percent, with traders citing a
bullish note from Morgan Stanley as the catalyst, in which the
broker says the miner’s industry-leading growth is not
recognised by the market.

BHP Billiton (BLT.L: Quote, Profile, Research) and Rio Tinto (RIO.L: Quote, Profile, Research) rose 2.9 and 1.9
percent respectively.

Inflation continued to be a key concern for markets, and was
driving sector stances, said analysts.

“The further you are from the consumer, the easier it is to
pass price increases on,” said Isherwood, who is overweight on
the mining sector but underweight on sectors such as retailers.

Across Europe, Britain’s FTSE 100 (.FTSE: Quote, Profile, Research) rose 0.5
percent, Germany’s DAX (.GDAXI: Quote, Profile, Research) rose 1.6 percent and France’s
CAC40 (.FCHI: Quote, Profile, Research) rose 1 percent.

Technicals showed an upward trend. The French CAC 40 (.FCHI: Quote, Profile, Research)
traded above its 50-day moving average for the first time since
March 9 and Britain’s FTSE 100 (.FTSE: Quote, Profile, Research) was above its for the
first time since March 8.

The PSI20 (.PSI20: Quote, Profile, Research) Lisbon stock index underperformed, down
0.3 percent. “The index is suffering from higher Portuguese
sovereign debt yields that are at new record levels and the
financial sector is the most hard-hit,” said Nuno Milheiro, a
trader at DiF brokerage in Lisbon.

BCP (BCP.LS: Quote, Profile, Research) fell 2.2 percent.

DIXONS FALLS

Dixons (DXNS.L: Quote, Profile, Research), Britain’s No.1 electricals retailer,
plunged 18 percent after it served up a profit warning and
gloomy forecast for 2011-12, adding to evidence cash-strapped
British shoppers are cutting back massively on non-essential
spending.

Also, on the downside, hearing aid maker Sonova (SOON.VX: Quote, Profile, Research)
fell 8 percent after its chairman, chief executive and chief
financial officer resigned following an insider trading probe.
[ID:nLDE72T04Z]

Bancassurer Irish Life & Permanent (IPM.I: Quote, Profile, Research) suspended trading
of its shares in London and Dublin after media reports that bank
stress tests might force it into state control. [ID:nLDE72T086]

Analysts cited the strength of Asian markets as another
reason for the market’s rise on Wednesday.

Japan’s benchmark Nikkei (.N225: Quote, Profile, Research) rose 2.6 percent with the
Bank of Japan’s purchases of exchange-traded funds lending
support.

“The situation in Japan has not got any worse,” said Andrea
Williams, who manages 1.3 billion pounds ($2.08 billion) in
assets for Royal London Asset Management.

(Additional reporting by Joanne Frearson and Andrei Khalip;
Editing by Hans Peters)

Miners lead Europe shares higher ahead of US data