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European shares recover as market eyes Cyprus compromise
March 20, 2013 / 4:32 PM / 5 years ago

European shares recover as market eyes Cyprus compromise

LONDON, March 20 (Reuters) - European shares broke a three-day losing streak on Wednesday as investors bet on policymakers finding a fix for Cyprus bailout problems, although some traders cautioned against buying up equities at current levels.

The pan-European FTSEurofirst 300 index provisionally closed up 0.4 percent at 1,199.10 while the euro zone’s blue-chip Euro STOXX 50 index rose 1.4 percent to 2,709.89 points.

Union Bancaire Privee fund manager Rupert Welchman felt the support of the European Central Bank (ECB) was sufficiently strong to prevent any major market hit from Cyprus, which rejected a proposed levy on bank deposits as a condition for a European bailout earlier this week.

“You’ve still got the ECB saying it will provide liquidity,” said Welchman, whose portfolio is overweight on northern European financial stocks.

“Cyprus will, of course, be a clear negative for European sentiment and it is a new and substantial negative, but the bigger picture is that Europe is trying to follow a roadmap to recovery and in this quest, Cyprus is a sideshow,” he added.

A 2.7 percent gain at Sanofi added the most points to the FTSEurofirst 300 and sent the drugmaker to fresh 7-year highs, as traders cited speculation that Sanofi could get regulatory approval for its Aubagio multiple sclerosis treatment pill.

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