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Europe shares end losing run; growth worries ease

Published 10/05/2010, 11:41 AM
Updated 10/05/2010, 11:44 AM

LONDON, Oct 5 (Reuters) - European shares rose on Tuesday, as confidence in the pace of economic recovery was boosted by upbeat U.S. services sector data, while a stimulus pledge from the Bank of Japan to spur the economy also reassured investors.

In a positive sign for the economy, the pace of growth in the U.S. manufacturing sector accelerated more than forecast last month, data from the Institute for Supply Management showed.

The pan-European FTSEurofirst 300 index provisionally closed 1.4 percent higher at 1,066.12 points, snapping six straight sessions of falls which formed the longest losing run since January 2009. Volumes, however, were light.

The Bank of Japan said on Tuesday it will pump more funds into the struggling economy and keep rates virtually at zero in a fresh dose of economic stimulus.

"The expectation is that the Fed will probably follow suit and the non-farm payrolls (data) ... will be the key indicator as to whether or not the Fed will embark on a policy of further asset purchases," said Michael Hewson, market analyst at CMC Markets.

Economy-sensitive mining stocks were among the heaviest gainers, with Anglo American, Rio Tinto and Xstrata rose 2.7 to 4.2 percent. (Reporting by Harpreet Bhal)

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