European shares enjoy day of better fortunes

European shares rode a technical bounce higher yesterday, albeit in low volume, as bargain hunters emerged to tap oversold areas of the market including carmakers and German blue-chips.

A German court ruling over the country’s involvement in the euro zone rescue fund, which threw up no negative surprises, and hopes for progress in the implementation of austerity cuts in the periphery also supported the rally, traders said.

The STOXX Europe 600 Automobiles & Parts index rose 6.1 per cent to become the best-performing sector after falling 12.8 per cent in the previous four sessions.

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“We got off to a good start before the German verdict, with investors just bottom fishing,” Mike Lenhoff, chief strategist at Brewin Dolphin, said.

The pan-European FTSEurofirst 300 index of top shares provisionally closed up three per cent at 930.69 points after hitting a two-year closing low in the previous session