* FTSEurofirst 300 index closes 0.3 percent higher
* Miners among top gainers as metals prices rebound
* Novo Nordisk surges 9 percent on setback for rivals
By Atul Prakash
LONDON, Oct 20 (Reuters) - European shares bounced back to
finish higher on Wednesday, led by strength in mining and
automobile stocks, though mixed company earnings and massive UK
government spending cuts capped gains.
The FTSEurofirst 300 <> index of top European shares
finished 0.3 percent higher at 1,086.48 points after hovering in
a tight range of 1,079.42-1,087.72 points. The index is up about
4 percent so far this year.
Miners were among the top gainers, tracking firmer metals
prices, which took strength from a weaker dollar after tumbling
on Tuesday in response to a rise in Chinese interest rates.
Anglo American <AAL.L>, BHP Billiton <BLT.L> and Xstrata <XTA.L>
rose 2.5 to 3.4 percent.
Economic concerns remained uppermost in analysts' minds.
"You have got the U.S. Federal Reserve ... looking as if
they will come in with quantitative easing (QE), but if they
don't do enough QE, the market will be disappointed. The most
important thing is how economic numbers develops," said Bernard
McAlinden, investment strategist at NCB Stockbrokers in Dublin.
Figures showed U.S. mortgage applications slumped last week
as interest rates on 15- and 30-year fixed-rate mortgages rose
for the first time in six weeks. []
The market got some support in the morning session after the
release of the minutes of a meeting of the Bank of England,
which reinforced expectations the central bank is edging towards
further quantitative easing. []
But caution returned after Britain said it would cut half a
million public sector jobs, raise the retirement age and slash
the welfare state as part of the biggest spending cuts in a
generation. []
AUTOS RACE HIHGER
Automakers were in demand. Their reliance on emerging
markets showed as PSA Peugeot Citroen <PEUP.PA> raised its
operating income goal on brisk sales in new markets and Audi
celebrated its millionth car sale in China. Peugeot rose 0.9
percent, while Daimler AG <DAIGn.DE>, Porsche <PSHG_p.DE> and
Renault <RENA.PA> gained 1.6 to 2.2 percent.
The Euro STOXX 50 <>, the euro zone's blue-chip
index, rose 0.5 percent to 2,851.52 points.
Raghee Horner, chief market analyst at Autochartist, said
the index continued to consolidate within 2,819 points and 2,867
points in the past sessions and had done little to correct or
advance the current uptrend. She saw support above 2,800 and
hesitation below 2,880 points.
"With the MACD histogram showing that momentum is still
maintaining its bullishness, the STOXX 50 seems to still be
struggling with selling pressure at the August 5 high at 2,849,"
she said, referring to Moving Average Convergence Divergence
technical analysis.
Among individual movers, Novo Nordisk <NOVOb.CO> surged 9
percent after U.S. health regulators declined to approve a
diabetes drug being developed by rivals Amylin Pharmaceuticals
<AMLN.O> and Eli Lilly <LLY.N>. That boosted prospects for
Novo's key new product hope Victoza.
Across Europe, the FTSE 100 <>, Germany's DAX <>
and France's CAC 40 <> rose 0.4 to 0.6 percent.
(Additional reporting by Blaise Robinson in Paris and Harpreet
Bhal in London; Editing by Will Waterman)
