London: European shares edged higher on Wednesday, led by miners as the price of copper and other metals rose on upbeat comments on the demand outlook from senior executives in the industry.
But some investors remained cautious ahead of a key parliamentary vote on austerity measures in Portugal that could see the country’s government brought down, and others were focused on the continued political uncertainties in the Middle East and North Africa.
At 4:03pm, the FTSEurofirst 300 index of top European shares was up 0.3% at 1,110.34 points, after falling 0.1% in the previous session.
Copper prices rose in London and Shanghai on Wednesday after bullish comments from mining executives on the metal’s outlook. .
Heavyweight miners to rise included Anglo American, BHP Billiton and Rio Tinto, up between 1.9 and 2.1%.
The euro zone’s sovereign debt crisis continued to worry some investors, although some analysts see geopolitical concerns as the more pressing issue.
Despite Wednesday’s rise the pan-European index is still down more than 6 percent from its 29-month peak of mid-February
“Markets can regain the highs,” said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.
“Oil price is the more persistent worry, with tensions in North Africa,” he said.
“The only thing big enough to be disruptive is the Spanish (sovereign debt) situation and you’re not getting any worse news coming out of Spain.”
The Brent crude oil price was steady near $116 a barrel, less than $4 off a 2-1/2 year high, after rising as much as 0.6% as intensifying unrest in Yemen highlighted the security risks facing oil output from the region.
Among individual companies, J Sainsbury, Britain’s third-biggest supermarket group, fell 5.3 percent after missing fourth-quarter sales forecasts, adding to signs of a slowdown in consumer spending as inflation climbs and the UK government’s spending cuts bite.
Bigger British rival Tesco fell 1.9%.
Across Europe, Britain’s FTSE 100 and France’s CAC40 rose 0.5 and 0.6% respectively; Germany’s DAX rose 0.3%. Portugal’s benchmark fell 1.3%.
Some commentators say the DAX will soon outperform, helped by the strong German economy.
“In the light of the catastrophe in Japan the DAX has underperformed other European countries due to utilities with a high exposure to nuclear power and globally connected production companies,” said Deutsche Bank in a note.
“Assuming that the nuclear crisis remains contained, the recovery of the Dax could continue.
Clothing retailers did better than food outlets. Shares in Zara owner Inditex rose 5.7% after the world’s biggest clothing retailer posted a 32% jump in net profit, meeting expectations and driven by an aggressive expansion into developing markets including China and India..
H&M (HMb.ST rose 3.2%. UniCredit, Italy’s biggest bank, rose 2.1% after it reported lower costs and better underlying results, despite a bigger than expected 22% fall in the headline profit after it took a hit on its Kazakh business.
The Bank of England’s Monetary Policy Committee maintained its 6-3 split in favour of keeping rates on hold this month, seeing no major change in the medium-term outlook, minutes to its March 9-10 meeting showed on Wednesday.
Data on Tuesday showed that British inflation surged to a 28-month high of 4.4% last month, reviving speculation that the Bank of England may soon raise interest rates.
But British finance minister George Osborne is expected to show the government’s ambitious deficit-busting goals are still within reach when he unveils his annual budget later on Wednesday.
The European Central Bank is set to increase rates next month. “Hikes in rates reflect assurance of ongoing growth,” McAlinden said. (Editing by Greg Mahlich)