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European shares track U.S. gains to end slightly higher

Source : REUTERS
Last Updated: Wed, Sep 04, 2013 16:40 hrs

* FTSEurofirst 300 index rises 0.2 percent

* Mirrors gains in U.S. equities

* Travel shares down as Ryanair slides

By Atul Prakash

LONDON, Sept 4 (Reuters) - European shares closed slightly firmer after choppy trading on Wednesday, helped by a rally in U.S. technology stocks while geopolitical concerns kept gains in check.

The FTSEurofirst 300 index of top European shares closed 0.2 percent higher at 1,214.96 points after falling to a low of 1,204.77 points.

"We have seen some buying momentum in beaten-down stocks, but the market will continue to be dominated by the Syrian issue in the coming sessions," Tom Robertson, senior trader at Accendo Markets, said.

"A limited U.S.-led military strike is factored in but some investors also fear that the situation could dramatically change once the attack begins," he said.

On Wednesday, U.S. President Barack Obama won backing for a strike from key Congress figures and Russia said it did not rule out agreeing to military action if Damascus were proven to have carried out a chemical weapons attack there.

However, a sharp drop in Italian equities on domestic political uncertainty and weaker travel stocks after a Ryanair profit warning limited the broader market's gains.

Italy's FTSE MIB fell 1.4 percent on concerns over the government's survival, with some papers saying former Prime Minister Silvio Berlusconi, who faces possible eviction from the Senate on a tax fraud conviction, was considering withdrawing his party's support from the government.

Among sectoral movers, the STOXX Europe 600 Travel and Leisure index fell 1.6 percent, the worst performer, after Europe's biggest budget airline, Ryanair, said it could miss its annual profit target for the first time in a decade on lower demand and a weaker pound.

Ryanair shares fell 13.4 percent.

"Uncertainty over a high oil price will mean further pain for under-pressure profit margins for any budget airline ... I've seen a lot of risk taken off the board simply because of the uncertainty surrounding Syria," said Jordan Hiscott, trader at Gekko Global Markets.

Crude oil prices have surged more than 4 percent in one week.

Technical analysts said the stock market would remain supported at some key levels.

Petra Kerssenbrock, technical analyst at Commerzbank, said the euro zone's blue-chip Euro STOXX 50 index was likely to find support at its 100-day moving average at around 2,728, with the latest moves seen as a continued consolidation of the market's strong June-August rally.

The Euro STOXX 50 index was up 0.2 percent at 2,758.29 points after falling to a low of 2,725.56 earlier.




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