Telecoms merger buzz boosts European shares
LONDON, June 17 (Reuters) - European shares recovered on Monday as talk of takeover activity in the telecoms sector helped stock markets claw back losses suffered in the previous week.
However, some traders expected European equities to be stuck in a relatively tight range in the near-term, while uncertainty persists over the future monetary policy of major central banks such as the U.S. Federal Reserve.
The pan-European FTSEurofirst 300 index provisionally closed up 0.8 percent at 1,184.80 points, while the euro zone's blue-chip Euro STOXX 50 index rose 1.4 percent to 2,703.86 points.
The STOXX Europe 600 Telecoms Index was the best-performing sector, rising 1.6 percent after speculation that AT&T was interested in Spain's Telefonica, which was denied by Telefonica. Telefonica rose 2.3 percent while UK peer Vodafone advanced 1.6 percent.
Despite the market recovery, Logic Investments' strategy head Peter Rice said the rebound did not look wholly convincing, with the FTSEurofirst 300 still down some 6 percent from its 2013 peak of 1,258.09 points struck in late May.
"The rallies look corrective in nature. We don't see any new money participating in it. We're still a good way off the May highs and we still look stuck in a range. If anything, the risk still remains to the downside," said Rice.