European shares rise

European stocks bounced from one-month lows on Wednesday, helped by an upbeat US job report and growing confidence Greece's bond swap offer to private creditors will succeed. As major banks and pension funds threw their weight behind Greece's bond swap offer to private creditors, investors positioned for the likelihood that the deal and a 130 billion euro ($170.6 billion) international bailout package would be secured, with a deadline on Thursday.
The FTSEurofirst 300 index of top European shares ended up 0.6 percent at 1,058.45 points, while the euro zone's blue chip Euro STOXX 50 index was up 0.7 percent at 2,460.77 points. Both indexes, which tumbled 2.6 percent and 3.4 percent respectively on Tuesday following an almost uninterrupted 2-1/2 month rally, bounced off their 50-day moving averages, seen as major support levels.
"Investors believe that Greece will once again soldier on, and that some form of deal will be reached. Consequently, buyers have crept back in to equities," said David Morrison, market strategist at GFT Markets. Still the Euro STOXX 50 volatility index, Europe's main barometer of anxiety known as the VSTOXX index, remained around a near two-month high.
Demand for German bonds at an auction was higher as investors sought a safe haven for their money, shrugging off low yields on offer. "As long as the (Greek) sword of Damocles hangs over the market, uncertainty will not disappear. If there will be good news out of Athens, the market could start a rally," a German trader said. Around Europe, UK's FTSE 100 index was up 0.4 percent, Germany's DAX index gained 0.6 percent, and France's CAC 40 won 0.9 percent.
Technical analysts noted that the German DAX was currently supported at about 6,650 points, which also corresponds with its first Fibonacci retracement level, said Gregor Kuhn, technical analyst at IG Markets. "Should today's correction prove to be sustainable, the index will find its next relevant support in the 6,350-6,400 range. In the middle of this interval also the second Fibonacci retracement can be found," Kuhn said.
Luxury goods makers rallied, with LVMH, Burberry, PPR and Hermes closing 1.6-3.2 percent higher, on renewed talk that China will cut import taxes on luxury goods to boost consumption. Adidas was one of the biggest decliners in the FTSEurofirst 300 after the German sportswear group stuck to forecasts for a slowdown in sales growth in 2012.