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Miners lead Europe shares up on strong China data

Published 11/01/2010, 05:55 AM
Updated 11/01/2010, 06:00 AM

* FTSEurofirst 300 rises 0.7 percent

* Miners up after strong China data

* For up-to-the-minute market news, click on

By Brian Gorman

LONDON, Nov 1 (Reuters) - European shares rose on Monday, with miners gaining on higher metals prices after surprisingly strong Chinese manufacturing data, and as the dollar weakened ahead of the U.S. Federal Reserve's likely monetary easing.

At 0929 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,093.67 points.

The benchmark rose 2.4 percent in October, and is up around 70 percent from a lifetime low of March 2009, with several economies having emerged from recession, boosted by stimulus from governments and central banks worldwide.

China's factories ramped up their production last month and were buoyed by an influx of new business, highlighting the strength of the world's second-largest economy but also pointing to price pressures.

Miners to gain included Eurasian Natural Resources Corp., Kazakhmys, Lonmin and Xstrata, up between 1.8 and 3.4 percent.

On Wednesday, at the end of a two-day meeting, the Federal Reserve is likely to announce further quantitative easing.

"The China data was good. You want demand strong. It's the demand rather than the dollar you'd be worrying about," said Philip Isherwood, European equities strategist at Evolution Securities.

"The market is expecting QE, whether it is a large dollop or in smaller amounts."

He added that the market would have to "wait to see what the Fed does" to see whether the dollar would continue to weaken or stabilise. A weaker dollar is likely to hurt European exporters.

Crude prices also gained on the weaker dollar, topping $82. Energy companies to gain included Total and Repsol, up 1.2 and 1.1 percent respectively. ENI rose 1 percent, helped by an upgrade from Credit Suisse.

RYANAIR FALLS

Among individual companies, Europe's biggest low-cost airline Ryanair fell 3.6 percent after second-quarter profit trailed estimates, though it reported a 17 percent increase in first half net profit and upgraded its full-year earnings guidance.

Serco fell 5.7 percent after the Sunday Telegraph reported that the UK government will order the outsourcing company to explain why it contacted suppliers to demand a 2.5 percent "cash rebate" on their work this year or risk losing future contracts.

Bayer rose 2.9 percent higher after the company said late on Sunday that a new stroke prevention drug developed jointly with Johnson & Johnson proves a safe alternative to the standard treatment.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 rose between 0.9 and 1 percent.

Later in the session, investors' focus will switch to U.S. PMI manufacturing and construction data, due at 1400 GMT, half an hour after Wall Street opens. Other data due later this week includes the non-farm payroll numbers on Friday. (Editing by Louise Heavens)

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