European shares little changed

European shares ended little changed on Wednesday, as gains in commodity stocks were offset by weaker autos, but investors remained upbeat about prospects for the region's equities following solid economic data. The pan-European STOXX 600 index ended at 380 points after moving in an out of positive territory throughout the session. UK's FTSE added 0.1 percent and Germany's DAX slipped 0.5 percent.
Euro zone businesses had their best quarter in six years, construction purchasing managers' indexes showed, with individual countries' data also improving, indicating broad-based growth in economies across Europe. Though major indexes were little changed after the data, it added to an improving picture for investors looking at European equities.
"It's the most positive economic backdrop that we have seen since Mario Draghi's been head of the ECB," said Mike Bell, global market strategist at J.P. Morgan Asset Management. "Investors are not fully pricing in that improvement in economic fundamentals, perhaps understandably because of political concerns," he added, noting caution around the French election. "We think that now is a good opportunity to be buying European equities while others are still fearful." Draghi has been ECB president since November 2011.
In a further sign of growing confidence, Citi upgraded continental European stocks to overweight, predicting that the STOXX 600 index would rise another 8 percent by year-end.
Meanwhile merger and acquisitions activity continued to drive price action on Wednesday.
Syngenta rose 0.9 percent after ChemChina won conditional EU antitrust approval for its $43 billion bid for the Swiss pesticides and seeds group. "The approval .. is a big positive for the deal advancing towards closure," said Bernstein analysts in a note. Danish business support services firm ISS rose 4 percent after agreeing to buy US catering firm Guckenheimer for 1.5 billion Danish crowns ($222 million).
Oil services groups Wood Group rose 2.7 percent after saying it expected about 36 percent more cost savings from its deal to buy Amec Foster Wheeler for 2.2 billion pounds. Amec rose 2.2 percent. "Wood Group's increase to the synergies estimate from this deal is in line with our expectation that the original $134m target materially underestimated the opportunities for cost savings," said RBC oil services analyst Victoria McCulloch.
Petrofac lagged a positive oil sector, down 3.5 percent after downgrades from Deutsche Bank and Bernstein. Autos stocks were the worst-performing sector for the second straight day, down 1.1 percent to their lowest closing level in nearly 8 weeks.