* FTSEurofirst 300 ends up 0.3 pct at 1,107.65 points
* Euro STOXX 50 performs less well, up slightly at 2,543.45
* Some traders express scepticism over Greek debt deal
* Valuations favouring European shares - SocGen private bank
By Sudip Kar-Gupta
LONDON, Nov 27 European shares edged higher on
Tuesday after an agreement by international lenders to cut
Greece's debt gave some short-term support to investor
Some traders had their doubts about details of the plan,
though, among them Greece's ability to meet deficit-reduction
targets. Concern persisted over the lack of comprehensive
measures to tackle the euro zone debt crisis.
The FTSEurofirst 300 index, which rose 4 percent
last week, closed up 0.3 percent at 1,107.65 points as the Greek
deal clearing the way for the next tranche of aid to Athens.
The blue-chip Euro STOXX 50 index
failed to perform as well, ending just slightly higher at
"There's a glimmer of hope, but the market needs more than
that," said XBZ European equity options broker Mike Turner.
"There's a small negative bias towards the market. Medium-term,
it's sideways at best."
Turner said clients had bought put options - often used on
expectations prices will fall - on the Euro STOXX 50, with a
2,400 point strike price for options due to expire in December,
and a 2,200 strike price for those expiring in January.
Germany's DAX equity index rose 0.6 percent to
7,332.33 points, but JN Financial investment manager Edward
Smyth favoured short trades against it, which bet on a future
fall in the DAX, over long trades betting on future gains.
"As long as the DAX remains below 7,450, I see more value
being short than being long," he said.
Smyth remained sceptical over the problems facing Greece,
which has struggled to meet the terms of its sovereign bailout
while Spain remains under pressure to seek a sovereign rescue
"They've just given Greece a bit more rope with which to
hang themselves. The underlying economic situation hasn't
changed. I want to see more structural reforms in Europe," he
Food company Nestle and healthcare group Novartis
together added the most points to the FTSEurofirst
300, indicating a tendency to favour defensive stocks considered
safter in a weakening economy, over more risky stocks such as
VALUATIONS FAVOURING EUROPEAN EQUITIES
Other traders and investors were more positive on European
equities. Societe Generale's Private Banking arm wrote in a
research note that it expected the Euro STOXX 50 index to end
the year at 2,650 points.
The FTSEurofirst 300 is still up nearly 10 percent since
European Central Bank head Mario Draghi pledged in late July to
do "whatever it takes" to protect the euro from the region's
"We have added to our long positions on European equities as
quantitative models saw the recent drop in equities as a
retracement and therefore a buying opportunity rather than a
change of a long-term trend," said Rafael Molinero, who runs
quantitative hedge fund Molinero Capital Management.
European shares are also still valued slightly more cheaply
than those in the United States.
According to Thomson Reuters Starmine data, the pan-European
STOXX 600 index has a price-to-earnings (PE) ratio of
11.2 for estimated earnings over the next 12 months - less than
a corresponding P/E of 12.6 for the U.S. S&P 500 index.
"We tactically prefer euro zone equities to other markets as
most of the bad news has been priced in and rock-bottom
valuations offer greater upside," SGPB wrote in its note.