European shares ended higher on Wednesday, helped by strong mining stocks, and analysts said markets should rise even higher once visibility on issues such as the Libyan conflict and Japanese nuclear situation improves. Market experts said equities were attractive in terms of valuations and as compared to other asset classes, while chartists saw a key index bouncing back in the second quarter.
The FTSEurofirst 300 index of top European shares ended 0.5 percent higher at 1,112.36 points after falling to 1,102.35. Volumes were 95 percent of its 90-day daily average. Miners were the best performing sector, tracking gains in key base metals that rose on expectations of a supply deficit this year. The STOXX Europe 600 Basic Materials index rose 2 percent, while Xstrata was 3.5 percent higher. Banking shares underperformed the wider market on renewed concerns of a euro zone debt crisis. The European banking index fell 0.04 percent, while Portugal's PSI 20 dropped 1 percent. Banco Espirito Santo and Banco BPI fell 0.5 percent and 3.5 percent respectively.
Charts predicted more gains for the Euro STOXX 50 index, which rose 0.4 percent to 2,866.23 points. "We are advising our clients to buy on the weakness. We expect more strength in the second quarter and a rally into the region of 2,950 and 3,000 during late April and the first half of May," said Michael Riesner, technical analyst at UBS Investment Bank. He saw support at last week's low of 2,717.