European shares rise on easy monetary backdrop, France outperforms
(Adds closing prices) * Glencore, Arcelor lift miners; VW up after hitting 5-yr low * France outperforms as economic data beat expectations * K+S wipes out one-quarter of value as Potash withdraws bid * Lisbon shares higher after Portuguese election By Danilo Masoni MILAN, Oct 5 (Reuters) - European shares rose sharply on Monday as weak data in Europe and elsewhere reinforced expectations the broad monetary policy backdrop will remain equity-friendly, with Glencore and ArcelorMittal lifting the mining sector. The pan-European FTSEurofirst 300 index ended up 3 percent and the euro zone's blue-chip Euro STOXX 50 climbed 3.3 percent. Both had fallen on Friday before Wall Street rebounded to end in the black. Euro zone business activity grew at its weakest pace in four months during September, surveys showed on Monday. "Data today is moderately negative for equities .... but their impact is practically neutral because of growing expectations that easing monetary policies in various countries will continue or be expanded," said Marco Vailati, head of research at Italy's Cassa Lombarda. He added retail sales were positive as they confirmed Europe's economy was growing. U.S. stocks rose on Monday, with the S&P 500 up for the fifth day, after last week's disappointing jobs report hardened views that the Federal Reserve won't raise interest rates this year. France's CAC outpaced the rest of Europe with a gain of 3.5 percent following a report showing services activity accelerated in September more than previously thought, a sign that the euro zone's second-biggest economy finished the third quarter on a firm footing. "The economic data in France was today's surprise," said Andrea Cuturi, chief investment officer at asset manager Anthilia Capital. "Data elsewhere in Europe was not particularly exciting. Signs of an economic acceleration in the euro zone are there, but full of traps, from China to emerging markets and local politics." Mining and trading giant Glencore extended its rebound from a sell-off a week ago, rising 21.1 percent on Monday after a surge in its Hong Kong-listed shares. Some traders said Glencore was buoyed by talk it might sell some of its agricultural assets to cut its debt. "Sentiment is improving towards Glencore on the signs that it may be able to sell some of its assets," said Thames Capital Markets trader Nav Banwait. Gains by steelmaker ArcelorMittal also helped mining stocks. It rose 8.7 percent after Citigroup raised its rating on the stock to "buy" from "sell". Volkswagen, the car maker caught in a scandal over rigged emissions tests, rose 1.3 percent. The stock earlier fell as much as 6.5 percent to touch a five-year low, while its credit default spreads jumped. German potash producer K+S slumped 24.7 percent after Potash Corp withdrew a bid. Lisbon's benchmark PSI-20 index rose 3.5 percent after Portugal's centre-right government won Sunday's election, albeit without securing an outright majority. European stocks remain below their 2015 peaks, reached around April, having been pulled down in the third quarter by concerns that China's economy was slowing. According to data from Sentix on Monday, sentiment in the euro zone deteriorated further in October as investors, rattled by a slowdown in emerging markets, pared back their expectations for the economy. Today's European research round-up (Additional reporting by Sudip Kar-Gupta in London; Editing by Mark Trevelyan)
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