MW: European shares end higher on auto, commodity gains
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares posted gains Monday, with auto makers and commodity-sector firms climbing, as one broker said low valuations and sentiment should limit downside for stocks.
The Stoxx Europe 600 index (ST:SXXP 251.12, +2.79, +1.12%) rose 1.2% to 251.36.
Morgan Stanley European equity strategists said Monday that they believe a full-blown double-dip in European earnings, U.S. and global gross domestic product is unlikely.
"Employment data seem to us to be the key metric to watch, but we think the prospects of an improvement in payrolls are good, given strength in job surveys. However, many commonly followed lead indicators seem likely to slow further, which may mean growth fears persist for another month or two," they said.
"Cheap valuations and already cautious sentiment offer support for markets and limit the downside in the absence of a double-dip recession," they added.
Of the regional benchmarks, the U.K. FTSE 100 index (UK:UKX 5,072, +25.21, +0.50%) rose 0.5% to 5,071.68, the German DAX index (DX:DAX 6,157, +86.62, +1.43%) added 1.4% to 6,157.22 and the French CAC-40 index (FR:PX1 3,576, +56.72, +1.61%) advanced 1.6% to 3,576.45.
U.S. stocks edged lower in early trading while Asian shares ended down.
Investors bought shares in Spanish oil and gas firm Repsol (ES:REP 17.34, +0.45, +2.63%) (REP 21.45, +0.32, +1.51%) , up 2.7%, after the firm was upgraded to buy from neutral at Bank of America Merrill Lynch.
The broker said an aggressive 28 billion euro investment program from 2010 to 2014 will ultimately drive top quartile exploration and production growth, significantly enhance the profitability of its refineries and materially grow its liquefied natural gas business.
Elsewhere in the commodity sector, Rio Tinto (UK:RIO 3,248, +58.50, +1.83%) (RTP 49.02, +0.24, +0.49%) shares advanced 1.8% and Antofagasta (UK:ANTO 848.00, +21.00, +2.54%) shares rose 2.5%.
Autos were also on the move, taking back losses made Friday when negative broker comment weighed on the sector. Daimler (DE:DAI 43.10, +0.91, +2.16%) shares were up 2.8%, BMW (DE:BMW 41.17, +0.59, +1.44%) shares rose 2%, and Volkswagen (DE:VOW3 75.78, +0.58, +0.77%) preference shares added 1.2%.
Infineon Technologies (DE:IFX 5.09, +0.11, +2.13%) rose 2.9%.
The firm is not involved in talks with Russian conglomerate Sistema, Dow Jones Newswires reported Monday, citing a spokesman for Infineon.
The spokesman's statement was in response to a report in Financial Times Deutschland, which said that Russian President Dmitry Medvedev and Prime Minister Vladimir Putin are pressuring German Chancellor Angela Merkel to let Sistema take a 29% stake in the German semiconductor maker.
Over the weekend at the American Diabetes Association meeting, the French drugmaker presented data that Royal Bank of Scotland analysts said "roundly rebutted the notion of any increased risk of Lantus relative to any other insulin."
Turning to decliners, shares of Germany's Q-Cells (DE:QCE 5.53, -0.36, -6.13%) slid 5.2% after the stock was downgraded to sell from neutral at Goldman Sachs.
The broker said "we expect further declines in solar-cell prices in the coming years to lead to more losses in the cell manufacturing business, which we believe will only at best be offset by contributions from new activities."
Shares of Swedish retailer Hennes & Mauritz (SE:HMB 216.50, -3.90, -1.77%) declined 1.8% after the firm's chief executive officer told French newspaper La Tribune over the weekend that the company isn't for sale.
