London - Gains at food group Nestle and Deutsche Post propped up European shares on Wednesday, with a pan-European equity index on track for its seventh day of gains.
The possibility of new stimulus measures from the European Central Bank when it meets on Thursday also helped to lift European stock markets.
The pan-European FTSEurofirst 300 index edged up by 0.1 percent to 1,342.21 points in late-session trading, putting it on track to extend a winning streak into a seventh straight day.
Nestle rose 1.9 percent rise and Deutsche Post 4.4 percent; together they added the most points to the FTSEurofirst 300.
Nestle was boosted by brokerage Bernstein's decision to raise its rating on the stock to “outperform” from “market perform.” Deutsche Post gained after it said it expected profits to increase through to 2020.
“European equities are set to give good returns this year. Flows have turned positive, GDP should grow by at least 1 percent and corporate profits by around 10 percent,” said Philip Dicken, head of European equities at Threadneedle Investments.
“A weaker euro, which is a likely result of looser European monetary policy, will boost profits further.”
NEW ECB ACTION?
The FTSEurofirst 300 rose 16 percent in 2013 to post its best annual gain since 2009.
The index reached 1,353.47 points - its highest level since May 2008 - in late January this year.
Concerns about a slump in emerging markets, coupled with worries about geopolitical tensions between Russia and Western powers over Ukraine, have pushed European equities down from multi-year highs over the last two months.
Speculation the ECB will take new steps on Thursday to strengthen the region's fragile economic recovery could give European stock markets a lift, traders said.
Andrea Williams, European equities fund manager at Royal London Asset Management, said the ECB could introduce negative deposit rates or other measures to help the region's smaller companies get access to lending.
Lorne Baring, managing director of wealth management firm B Capital, also said there was a good chance of stocks getting some “tailwind” from the ECB on Thursday.
“It's not possible to predict if it will be this Thursday, but we imagine that in Q2 or Q3 there is a good possibility of further monetary stimulus from the ECB, and we think that will take the form of negative overnight rates,” he said. - Reuters