European shares end flat; miners the main drag

PARIS Wed Jan 16, 2013 4:48pm GMT

PARIS Jan 16 (Reuters) - European shares ended mostly flat on Wednesday, bouncing off intraday lows as many investors used the early dip to boost their exposure to equities, with mining shares the main drag.

The FTSEurofirst 300 index of top European shares unofficially closed 0.01 percent higher at 1,160.36 points, after losing as much as 0.5 percent earlier in the session.

The benchmark index - which is already up 2.3 percent so far this year and has hit a near-two-month high earlier this month - has surged 8.8 percent since mid-November as fading fears of a break-up of the euro zone prompted investors to scoop up the region's equities.

"Europe's catch-up rally is set to continue," said Roland Kaloyan, strategist, global asset allocation, at Societe Generale CIB.

"There is no reason to switch out now. Markets are flooded with liquidity, low volatility levels are supporting inflows, and valuations are still attractive."

Mining shares were among the day's losers, falling along with metal prices as investors remain cautious over China's economic outlook. Rio Tinto fell 0.9 percent and Vedanta Resources dropped 1.4 percent.

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