* FTSEurofirst 300 rises 0.2 percent
* Commodities stocks benefit from oil and metals rally
* Defensive pharmaceuticals gain
By Sarah Marsh
FRANKFURT, Nov 7 (Reuters) - European shares edged higher in
early trade on Friday, recovering after a sharp drop on Thursday
as commodities stocks reflected a pick-up in crude oil and
metals prices.
The FTSEurofirst 300 <> index of leading European
shares rose 0.1 percent by 0937 GMT, after falling 5.8 percent
on Thursday, as rate cuts by the European Central Bank and the
Bank of England failed to assuage economic concerns.
"This is simply a technical rebound, nothing else, because
valuation wise, earnings and everything is still fairly bleak,"
said Franz Wenzel, strategist at AXA Investment Managers in
Paris.
"There is no fundamental reason other than maybe people
starting thinking about monetary policy in a more positive sense
and commodity prices are giving some support."
On Wall Street, stocks fell on Thursday on the back of poor
corporate outlooks and bleak sales from major retailers that
fuelled fears of a worsening economic downturn, while in Asia,
Japan's Nikkei index <> closed 3.6 percent down on Friday.
An easing in the U.S. dollar against a basket of major
currencies <.DXY> helped push up the price of copper and
aluminium as well as gold and platinum.
BHP Billiton <BLT.L>, Kazakhmys <KAZ.L> and Anglo American
<AAL.L> rose between 1.8 and 4.1 percent.
Energy stocks also climbed, as oil <CLc1> rose 1.8 percent
to $62.35 a barrel, bouncing back from a session trough of
$59.97, its lowest since March 22, 2007. BP <BP.L>, ENI <ENI.MI>
and Total <TOTF.PA> gained between 0.6 and 3 percent.
After Thursday's steep falls in equities, some analysts said
the rate cuts could now be reassuring investors.
"We expect the rescue packages of governments for the
banking system, global rate cuts by central banks and the latest
recovery of share prices to have at least trimmed fears," said
Ralph Solveen, an economist at Commerzbank in Frankfurt.
Positive news also came from Germany, where data showed the
first monthly increase in exports in three months.
[]
Defensive pharmaceuticals rallied, with Shire <SHP.L>
climbing 1.1 percent, Merck <MRCG.DE> rising 1 percent, and
Fresenius Medical Care <FMEG.DE> up 1.1 percent.
INVESTORS EYE PAYROLLS DATA
Investors are waiting for the latest U.S. nonfarm payrolls
report, due at 1330 GMT, which is widely expected to show the
world's largest economy continued to shed jobs in October. The
median forecast of economists polled by Reuters last week is for
payrolls losses of 200,000 in October. []
"Another big negative number is expected today but anything
too harsh here could act as another prompt for further selling
in the near term," said Matt Buckland, a dealer a CMC Markets.
Financials tempered gains on the broader European market,
with BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC> and UBS
<UBSN.VX> down 0.8 to 3.4 percent.
An exception was reinsurer Munich Re <MUVGn.DE>, rising 4.7
percent, after the company released third-quarter figures which
analysts said were not as bad as they first appeared.
[]
Kepler analyst Fabrizio Croce in a note to clients that
Munich Re's 8 billion euro shareholders' repayment, its share
buyback of 2 billion euros and a dividend of at least 1 billion
euros per year by 2010 were all positive.
In other news, Imperial Energy <IEC.L> rose 20.6 percent,
after Russia's anti-trust office allowed Indian energy firm ONGC
<ONGC.BO> to buy the London-listed but Russia-focused firm.
[]
Around Europe, the FTSE 100 index <> rose 1 percent,
while Germany's DAX <> gained 0.4 percent and France's CAC
40 <> rose 0.3 percent.
(Editing by Hans Peters)
