LONDON, Sept 15 - European blue chips rose at midsession on Monday, led by consumer cyclicals such as Dutch electronics giant Philips on expectations an economic upturn will boost demand. Stocks have risen by about one-third since hitting a six year nadir in mid-March, prodded upward by signs the United States was leading a rebound in the global economy. Consumer cyclicals have outperformed other sectors on the belief that demand for their products will recover first. Some strategists worry, however, that this rosy scenario is too good to be true.
"Investors continue to hope for a sustainable pick-up in profits and continue to buy EPS downgrade stocks, as a way to position for a recovery.... Investors' expectations leave little scope for disappointment," said Khuram Chaudhry, a strategist at Merrill Lynch. Recovery-watchers will focus on U.S. second-quarter current account data and July business inventories, due for release at 1230 GMT, followed by August capacity utilisation and industrial production data at 1315 GMT. Exporters such as autos rose as the euro pulled back from a four-week peak against the dollar. U.S. stock index futures nosed up, an early signal of follow-through gains in New York.
By 1014 GMT, the FTSE Eurotop 300 index <.FTEU3> was up 0.83 percent at 908 points, while the DJ Euro Stoxx 50 index <.STOXX50E> gained 0.81 percent to 2,567 points. Volume on the benchmark FTSE Eurotop 300 was a thin 830 million euros and advancers outnumbered decliners by a ratio of about four to one. Around Europe, London <.FTSE> was 0.7 percent higher, Zurich <.SSMI> also gained 0.7 percent, Paris <.FCHI> rose 0.8 percent and Frankfurt <.GDAXI> was up 0.9 percent.
SWEDEN SAYS 'NO!'
Market reaction was muted to Sweden's rejection of the European Union's single currency, with the "no" campaign carrying the vote by a hefty 56-42 percent margin. Analysts said a "no" was expected, while companies said it may affect long-term investment decisions but would not have an impact in the short term. Shares in Swedish banks gained, as they will not have to shoulder the costs of converting to the euro, but information technology stocks fell on the loss of potential business linked to a currency switch. Elsewhere in Europe, Philips was up 4.6 percent after raising its targets for chip sales on Friday. Investment banks Morgan Stanley and JP Morgan both raised their earnings per share targets for the company on Monday. Fellow Dutch firm, air carrier KLM rose 1.5 percent on talk a long-anticipated alliance pact with Air France would be announced as soon as this week.
Shares in Swiss engineering firm ABB rose 5.3 percent on expectations that the key sale of its oil, gas and petrochemicals unit would be announced this week. Among smaller cap stocks, Manchester United rose three percent despite the club denying a news report of a take-over bid for the English soccer premier league champions. Among the decliners, French engineering firm Alstom was down 1.6 percent.//