* FTSEurofirst 300 up 0.7 percent
* Vodafone rises 8.2 pct on Verizon talks, telecoms rally
* Sentiment improves as potential Syrian attack delayed
By Tricia Wright and David Brett
LONDON, Aug 29 (Reuters) - Bumper gains among telecom stocks
powered a rebound in European shares on Thursday after Vodafone
confirmed it was in talks with Verizon to sell
out of its U.S. joint venture.
The FTSEurofirst 300 closed up 0.7 percent at
1,207.05 points, bouncing back after falls of some 2 percent
over the last two days.
Vodafone jumped 8.2 percent after saying it was in
talks with Verizon to sell its 45 percent stake in their U.S.
joint venture Verizon Wireless, for what a Bloomberg report said
would be about $130 billion.
"Base case assumptions here remain that Vodafone stock
trades around 220-225 pence on a firm announced deal, so it
gives some 15 pence of upside from current levels," Simon
Maughan, analyst at Olivetree Financial Group said.
Vodafone's share price surge represented a rise of around 8
billion pounds ($12.4 billion) in the market capitalisation of
the group, which is the fourth biggest UK company by market
value after Royal Dutch Shell , HSBC
and BHP Billiton.
The news sparked a rally in the sector, with Telecom Italia
up 0.7 percent, Orange up 1.7 percent and
Deutsche Telekom rising 1.3 percent. The STOXX Europe
600 telecom sector index gained 3.3 percent.
The prospect of military action in Syria has taken its toll
on market sentiment in the past few days, fuelling worries about
Middle Eastern crude supply.
But investors were more open to buying on Thursday as
prospects of an imminent Western-led attack on Syria lessened,
and as some started to take the view that any military
intervention would be unlikely to have a huge impact on the
Data showed the U.S. economy grew at a faster pace than
expected in the second quarter.
This caused the index to pare back its gains as stronger
U.S. economic growth could encourage the U.S. Federal Reserve to
scale back stimulus more quickly, but it later recovered its
"If the markets do go down on the back of Fed tapering fears
or now on this Syria thing I'd be stepping in and buying," Paul
Jackson, strategist at Societe Generale, said.
Jackson reckoned that while there will be a period of market
uncertainty when the Fed starts to scale back its stimulus, this
will prove short-lived, and that even if there is military
intervention in Syria, it will be a "storm in a teacup".
"You may get Brent going up to $125 which I don't think is
enough for me to change my view on the world."