European shares rebound off lows in broad rally

LONDON Fri Feb 22, 2013 8:09am GMT

LONDON Feb 22 (Reuters) - European shares rebounded on Friday, with traders arguing that worries over the Italian election and a possible end to central bank stimulus steps would be short-lived, enabling markets to resume their rally.

The pan-European FTSEurofirst 300 index rose 0.4 percent to 1,155.97 points, recovering from a 1.5 percent fall in the previous session.

The euro zone's blue-chip Euro STOXX 50 index also rose 0.5 percent to 2,593.31 points, having fallen 2.3 percent in the previous session to a fresh 2013 low.

All European equity sectors were in positive territory, with the STOXX Europe 600 basic resources sector - which comprises major mining stocks - leading the way with a 1.1 percent rise.

Markets had fallen earlier this week over worries that the U.S. Federal Reserve may curb its monetary stimulus measures and on uncertainty over the results of elections next week in Italy, which has been hit hard by the euro zone's debt crisis.

However, Berkeley Futures associate director Richard Griffiths said investors were still using stock market falls to buy shares "on the dip" on expectations that any hurdles over potential issues such as Italy would be quickly overcome.

"The markets took a heavy dive earlier this week, but they're showing signs of a partial recovery," said Griffiths.

"The fact that traders are still buying on the dips shows that they're hoping that the global economic recovery will continue, although it will take time," he added.

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