* FTSEurofirst up 1.1 pct, Euro STOXX 50 rises 1.5 pct
* Equities recover after sharp sell-off on Thursday
* Fears over Italy, central bank help seen short-lived
* Tenaris tops FTSEurofirst 300 after higher profit
* Bargain-hunting investors scoop up mining stocks
By Sudip Kar-Gupta
LONDON, Feb 22 European shares were higher at
midday on Friday, led by miners, on expectations that worries
over the result of Italy's election this weekend would be
Most investors expect a centre-left government headed by
Pier Luigi Bersani and backed by current prime minister Mario
Monti to win and continue with reforms to fix Italy's economic
The pan-European FTSEurofirst 300 index was up 1.1
percent at 1,163.98 points at mid-session, having fallen 1.5
percent in the previous session.
The euro zone's blue-chip Euro STOXX 50 index
rose 1.5 percent to 2,617.50 points, having fallen 2.3 percent
in the previous session to a fresh 2013 low.
All equity sectors were in positive territory, with the
STOXX Europe 600 basic resources index - which comprises
major mining stocks - leading the way with a 1.7 percent rise.
Stock markets fell earlier this week over worries the U.S.
Federal Reserve may curb 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, data on Friday showing a rise in German business
morale, and expectations that Italy will choose a government
committed to tackling its debt problems, reassured investors
that any post-Italian election market dip would be short-lived.
"The main trend is still intact. After yesterday's painful
session, European equities managed to reverse losses and are
rallying nicely," said Gekko Markets sales trader Anita Paluch.
"With this 'risk-on' attitude, people are jumping on the
train to pick up bargains such as the miners," she said.
Italy's FTSE MIB equity index recovered from a 3.1
percent fall on Thursday to rise 1.4 percent, with Milan-listed
steel pipe maker Tenaris topping the FTSEurofirst 300
with a 4.5 percent gain after posting higher
A resurgence by former leader Silvio Berlusconi has caused
doubts over the outcome, and led investors to avoid taking big
positions on European equities ahead of the election result
early next week.
Matthias Thiel, a market strategist at M.M Warburg & Co,
said failure to form a stable, reform-oriented government in
Italy would lead his firm to review its positive stance on
"Italy would be a specific example of what we mean by
political risk. If there are signs that political risk
materialises or the fundamentals get worse again, we would
reduce our position," he said.
The majority of equity strategists and investors expected
any market decline caused by worries over Italy to be relatively
short-lived and minor, and for equity markets to hold onto their
upwards trajectory going into late March and April.
The FTSEurofirst 300 index is up 2 percent this year.
BTIG equity strategist Nick Xanders said markets could
remain volatile in the near term and he backed buying volatility
options, with the Euro STOXX 50 Volatility index
reaching a fresh 2013 high earlier this week. "Volatility is
still cheap and the risks are still skewed to the downside."