Europe stocks near 20-month peak
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PARIS, France (Reuters) -- European blue chip shares ended Tuesday at levels unseen in nearly 20 months, with technology issues buoyed by more signs of a recovery in the semiconductor sector while higher metal prices boosted miners.
Autos were a pocket of strength in the market as officials from DaimlerChrysler, Peugeot and BMW, gathered at the Geneva car show, said new models and a firmer market should help boost their sales this year.
But Belgium's Interbrew shed two percent amid fears it could overpay for a stake in the highly-rated shares of Brazilian peer AmBev.
UK banking duo HSBC and Abbey National also took some shine off the market after broker downgrades, while Anglo-Dutch computer services firm LogicaCMG bucked a firm technology sector after a disappointing outlook.
The FTSE Eurotop 300 index of pan-European blue chips closed 0.5 percent higher at around 1,023.6 points, its best close since July 11, 2002 and bringing gains so far this year to nearly seven percent.
But a relatively quiet corporate and economic agenda left investors with very little to chew on, meaning the benchmark Eurotop 300 index fluctuated in a narrow trading range of five points during the session.
Investors awaited the U.S. Federal Reserve's Beige Book report on economic conditions on Wednesday, interest rate decisions by the European Central Bank and the Bank of England on Thursday, and, most of all, Friday's U.S. non-farm payrolls data.
"Markets remain in a holding pen until they see the colour of the U.S. payroll data on Friday," said Bear Stearns economist David Brown. "The February jobs data carries the linchpin to a lot of things for stocks, bonds and currency markets."
Brown said the numbers would provide key directional clues to the recovery and to the Fed's policy intentions ahead, with the timing of the next move in U.S. interest rates remaining a background feature.
"The rumour mill has started to consider whether the Fed is going to raise rates or not, and we see that the chances of doing this in three or four months are quite high," said Daniel Birch of Execution brokerage.
The DJ Euro Stoxx 50 index closed 0.96 percent higher at 2,946.6 points as Frankfurt's DAX gained 1.1 percent and Paris's CAC 40 added one percent. In London, the FTSE 100 ended nearly 0.1 percent higher and Zurich's SMI added 1.1 percent.
On Wall Street, the Dow Jones industrial average was off 0.3 percent by 1700 GMT as New York investors took a breather after Monday's rally. The tech-studded Nasdaq Composite was 0.1 percent higher, supported by chip makers like Texas Instruments .
Techs, autos power fresh gains
News that Banc of America Securities had upgraded Texas Instruments, the world's top chip maker for cell phones, to a "buy" buoyed industry peers this side of the Atlantic.
French telecoms equipment maker Alcatel and Dutch chip equipment maker ASML both rallied more than four percent as Banc of America cited improved semiconductor pricing and strength in the handset market.
British microchip designer ARM Holdings rose 3.6 percent and French-Italian chip maker STMicroelectronics ended 3.3 percent firmer.
Autos also lent strength as European carmakers acknowledged a slow start to 2004 but said sales would eventually strengthen this year as new models and a firmer market help them overcome a weak dollar and a fierce price competition.
Luxury car maker BMW led sector gainers, up 3.4 percent.
The euro's fall to a five-week low against the dollar also helped boost a sector previously weighed by worries about the damage unfavourable currency exchange rates was doing to European car exports and company profits.
Elsewhere, miners shone as copper rose to a fresh 8-1/2 year high and platinum reached a 24-year high this week. London-listed mining giants Anglo American and Rio Tinto gained 3.8 percent and 1.5 percent respectively.
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