* FTSEurofirst 300 up 0.2 pct, Euro STOXX 50 down 0.04 pct
* Dovish Putin's comments help market pare losses
* Euro STOXX 50 halted by strong resistance level
* Recent market sell-off a buying opportunity -Saxo's Garnry
* Equity risk premium well above long-term average -ING IM
By Blaise Robinson
PARIS, Aug 14 (Reuters) - European stocks inched higher on
Thursday, turning positive after Russian President Vladimir
Putin made comments seen as conciliatory, though gains were
limited by weak German and French economic data.
Data showed Germany's economy suffered a surprise
contraction - its first in more than a year - in the three
months to June, and France slashed its growth forecasts for this
year and next after its economy failed to grow in the second
By 1430 GMT, the pan-European FTSEurofirst 300 index
was 0.2 percent higher at 1,328.24 points, adding to
this week's tentative rebound.
The euro zone's blue-chip Euro STOXX 50 index
was down 0.04 percent at 3,054.41 points. The index rose as much
as 0.6 percent in afternoon trading, before hitting strong
technical resistance at around 3,071 points, representing the
38.2 percent Fibonacci retracement of the index's recent
Speaking to Russian ministers and members of parliament in
Crimea, Putin said Russia would stand up for itself but not at
the cost of confrontation with the outside world. He also said
Russia would do everything in its power to end the conflict in
Ukraine as soon as possible.
Several traders said the market reacted positively to the
European stocks have tumbled in the past few weeks, with the
FTSEurofirst 300 losing as much as 7.4 percent between late June
and last week while Germany's DAX dropped as much as 11
percent, knocked by fears of an escalation of the Ukrainian
crisis and tensions between the West and Moscow.
"The recent decline in the DAX looks a bit exaggerated,
given that the nature of the current sanctions against Russia is
not really having a major impact on German companies," said
Peter Garnry, head of equity strategy, at Saxo Bank, in
"For me, the recent plunge in European equities is a good
opportunity to increase exposure to the region, and especially
to German equities. Today's GDP figure for Germany is weak, but
not alarming, and overall global growth is still expected to be
around 3 percent this year, so things aren't that bad for
Germany's weak GDP data pushed down German 10-year bond
yields, which briefly traded below 1 percent for the first time
ever, reflecting bets on fresh stimulus from the European
While the weak data clouded the macroeconomic picture in the
euro zone, it was also seen boosting the chances of an ECB move
to shore up the economy via an asset purchase programme, which
could drive up equity prices in the long run.
Robust earnings from a number of German companies also
helped stocks on Thursday, with TUI AG rallying 5.2
percent after saying it was very confident its full-year results
will reach the upper end of its target forecast after quarterly
profits almost doubled.
The recent correction in equities worldwide has boosted the
asset class's risk premium to between 100-200 basis points above
their long-term average, Patrick Moonen, senior multi asset
strategist at ING IM said.
"Taking risk in equities is well rewarded: we expect that
over the next one or two years, these risk premiums will
gradually normalise," Moonen wrote in a research note.
Europe bourses in 2014: http://link.reuters.com/pap87v
Asset performance in 2014: http://link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Francesco Canepa and Sudip Kar-Gupta
in London; editing by John Stonestreet)