July 8, 2016 / 8:57 AM / 2 years ago

European stocks edge higher as auto, mining shares gain

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* FTSEurofirst 300 up 0.3 pct, STOXX 600 up 0.4 pct

* Autos and miners among top sectoral gainers

* TDC gains on M&A report, shares up 8 pct

By Atul Prakash

LONDON, July 8 (Reuters) - European shares edged higher on Friday, with carmakers advancing after China reported an increase in vehicle sales last month and mining companies gaining as metals prices rose.

The pan-European FTSEurofirst 300 rose 0.3 percent and the STOXX Europe 600 was up 0.4 percent by 0817 GMT. However, the STOXX 600 was still down 2.7 percent this week and on track for its worst weekly fall since early May.

“The market is still rather nervous, but I would expect that we are moving towards bottom-building in the equity market. The concerns of the Brexit are reflected quite well in share prices so the question is how much pain will be before a relief. It’s probably still a little bit away,” Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.

“It will also depend on a rebound in banks as the systemic risk due to Brexit is certainly a concern and credit risks coming from Italy are weighing on the sector,” he said.

The STOXX Europe Automobiles and Parts index rose 2.1 percent after data showed passenger vehicle sales in China rose 19.4 percent in June from a year earlier.

Germany’s auto-heavy DAX index rose 0.7 percent, outperforming the broader market. BMW, Daimler and Volkswagen gained 1.3 to 2.3 percent.

The STOXX Europe 600 Basic Resources index gained 1.1 percent after prices of major industrial metals advanced. Rio Tinto, Anglo American and Glencore rose 1.1 to 2.2 percent.

European banks were up 1.5 percent, help by a 2 to 4.6 percent rise in shares of UniCredit, Intesa and Barclays.

Air France-KLM fell 1.2 percent after saying its June traffic declined 2.1 percent. TDC rose 8 percent after the financial newspaper Borsen reported a foreign buyout house was considering a possible takeover . (Editing by Larry King)

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