* FTSEurofirst 300 up 0.1 pct helped by telecoms
* Euro STOXX 50 rises 0.1 pct
* DAX underperforms after weak German economic data
By Sudip Kar-Gupta
LONDON, Jan 8 European shares edged up on
Tuesday with telecoms stocks rising to offset losses in major
financial shares although Germany's benchmark equity index
slipped on weak economic data.
Traders said most investors remained bullish on the
long-term prospects for European equities, arguing that any
decline would be relatively minor and short-lived before equity
markets recovered ground again.
The pan-European FTSEurofirst 300 index, which had
risen to a 22-month high last week, was up by 0.1 percent at
1,162.37 points, recovering from losses of 0.2 percent at the
The euro zone's blue-chip Euro STOXX 50 index
also rose 0.1 percent, although Germany's DAX fell 0.1
percent to underperform after data showed a contraction in the
"The DAX underperformance is on the back of that," said XBZ
Ltd European equity options broker Mike Turner.
However, low volatility signalled that few investors
expected a deeper fall on European equity markets and that
investor confidence remained relatively stable.
The Euro STOXX Volatility index, which tends to rise
on signs of increasing investor fears over the market and
economy, was down by 0.2 percent to 16.79.
"Trend followers will still be in bullish mode. There aren't
really any bearish signals out there," said Central Markets
senior broker Joe Neighbour.
TELECOM STOCKS GAIN
The STOXX 600 European telecoms sector was the
best-performing European equity sector, helped by a 2.7 percent
rise in Vodafone. Traders cited fresh speculation that
U.S. group Verizon could buy Vodafone's stake in Verizon
Arnaud Scarpaci, fund manager at Paris-based Montaigne
Capital, said he expected any pullback on European stock markets
to be short-lived before equities rebounded.
Investor appetite towards equities and the euro zone remains
robust after pledges made during the second half of last year by
the European Central Bank (ECB) to take new steps to tackle the
euro zone's sovereign debt crisis.
Exane BNP Paribas analysts said they expected European
equities to outperform U.S. equities this year and for European
shares to have the potential of offering double-digit total
returns in 2013.