European equity rally gathers pace on record inflows

lunes 17 de febrero de 2014 13:29 GYT

* FTSEurofirst 300 gains 0.4 pct, up about 5 pct in 2 weeks

* Europe stocks see record $17 bln in inflows year-to-date

* Italian shares edge higher as Renzi set to form government

By Atul Prakash and Blaise Robinson

LONDON/PARIS, Feb 17 (Reuters) - European shares climbed to a three-week high in thin volumes on Monday, extending a strong two-week rally fuelled by record inflows from an increasing number of investors betting on the region's economic recovery.

Data showing brisk lending in China, the world's biggest metals consumer, boosted miners, with BHP Billiton and Glencore Xstrata rising 1.2 percent and 1.8 percent respectively. The European mining index, was among the top sectoral gainers, up 1.1 percent, while Britain's commodity-heavy FTSE 100 rose 1 percent.

The FTSEurofirst 300 of top European shares ended 0.4 percent higher at 1,337.06 points, the highest close since late January. However, volumes on the index, which has gained in eight of the past nine sessions, were just 69 percent of its 90-day daily average due to a holiday in the United States.

Data from EPFR Global showed European equity funds have enjoyed net inflows of $17 billion since the beginning of 2014, marking a record start to the year and in sharp contrast to massive outflows from emerging market funds.

"One of the most popular pairs trade at the moment is being 'long' on shares that have no exposure to emerging markets and 'short' on shares that have a strong exposure to them. This has worked really well in January and it could continue," said Nicolas Rousselet, head of hedge funds and managing director at Unigestion in Geneva.   Continuación...