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European shares rise, led by technology, miners

Published 02/01/2011, 08:02 AM
Updated 02/01/2011, 08:04 AM

* FTSEurofirst 300 index rises 0.8 percent

* Infineon, ARM Holdings give tech a boost

* Miners gain as economic data improves sentiment

By Joanne Frearson

LONDON, Feb 1 (Reuters) - European share prices gained on Tuesday, with sentiment lifted by strong euro zone manufacturing data and technology stocks buoyed by positive results news from Autonomy and Infineon.

By 1234 GMT the pan-European FTSEurofirst 300 index was up 0.8 percent at 1,152.35 points after ending flat on Monday following Friday's falls when the market was hit by jitters over the Egyptian anti-government protests.

Investor confidence was given a boost after a survey showed January manufacturing activity in the euro zone accelerated more than previously thought, indicating the sector is regaining momentum across most of the region.

"We are having a strong day. Obviously we have had some decent PMI numbers out of the euro zone," Peter Dixon, economist at Commerzbank, said.

Positive corporate numbers also helped sentiment.

"I also suspect the strong earnings numbers which have been coming out are driving the market higher. The market looks firm at the moment though anything could derail it with the situation in Egypt," Dixon said.

Technology stocks featured among the top performers, with enterprise search software maker Autonomy jumping 6.9 percent after sales came in slightly above expectations.

German chipmaker Infineon gained 1.7 percent after it raised its full-year outlook, while British chip designer ARM whose architecture is licensed to Infineon, rose 2.7 percent after forecast-beating fourth-quarter profits.

MINERS RISE

Miners were in demand, gaining for the second session as confidence improved about the global recovery and the outlook for metals.

Sentiment in the sector was given a boost after HSBC's China Purchasing Managers Index reported a rise in January showing solid growth in the country's vast manufacturing sector.

The STOXX Europe 600 Basic Resources gained 2.1 percent, while Antofagasta, Fresnillo and Kazakhmys rose 3.4 to 4.8 percent.

On the downside, however, bearings maker SKF, a bellwether for manufacturing, fell 6.4 percent after it said it faced headwinds due to currency and higher raw material costs.

BP slipped 0.6 percent after profits came in weaker than expected.

And analysts said the FTSEurofirst 300 index which has risen 2.8 percent since the start of the year could be due for a correction after two straight months of gains.

"The momentum to the upside has to continue over the next two to three weeks or we could see a correction coming in. A correction of 5 to 8 percent can actually be quite healthy for a bull market," Joshua Raymond, market strategist at City Index said.

Later in the session investors will get the Institute of Supply Management's manufacturing figures from the United States, due at 1500 GMT, a further measure of the health of the world's biggest economy.

Across Europe, the FTSE 100 index was up 0.9 percent, Germany's DAX was also 0.9 percent higher and France's CAC 40 gained 0.8 percent. (Additional reporting by Harpreet Bhal; Editing by Greg Mahlich)

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