* FTSEurofirst 300 index closes flat
* Barclays slips 13.5 pct on Abu Dhabi stake sale
* Carmakers rise, near-term uncertainty seen over
By Atul Prakash
LONDON, June 2 (Reuters) - European stocks ended flat on
Tuesday as stronger auto shares negated the impact of weaker
banks, which were led lower by Barclays <BARC.L> after Abu Dhabi
sold more than 11 percent of the lender's shares.
The FTSEurofirst 300 <> index of top European shares
closed down 0.39 points at 885.88, having hit an intraday high
of 888.94 -- its highest since early January. The index, which
slumped 45 percent in 2008, has jumped 37 percent since hitting
a lifetime low in early March.
Carmakers advanced after General Motors <GM.N> filed for
bankruptcy protection in the United States on Monday. Investors
felt relieved following the end of the near-term uncertainty,
traders said.
BMW <BMWG.DE>, Porsche <PSHG_p.DE> and Renault <RENA.PA>
rose 2.1-2.6 percent, while Volkswagen <VOWG.DE> surged 10
percent, with traders citing factors including hopes the
automaker will benefit if majority shareholder Porsche
<PSHG_p.DE> finds a Middle Eastern investor with deep pockets.
However, banks <.SX7P>, which have more than doubled since
early March, took most points off the index. Barclays slipped
13.5 percent after Abu Dhabi's International Petroleum
Investment Company sold a stake in the bank, reaping a $2.5
billion profit in just seven months.
"There is some profit taking, but equally there are pockets
in the market where you have got fairly sharp appreciation going
on," said Jonathan Lawlor, head of European research at
Fox-Pitt, Kelton.
"It's still highly macro-sensitised and dependent on
economic series and currency moves," he added.
The market got some support from data showing pending sales
of previously owned U.S. homes in April unexpectedly saw their
biggest monthly gain in 7-1/2 years buttressing views the U.S.
recession was easing. []
Key ministers from Japan and Germany saw signs of growth
next year and a global consumer survey by Ipsos and Reuters
found confidence stabilising, though unemployment in the euro
zone jumped to a near 10-year high. []
A persistent belief that the global economy is on the road
to recovery pushed down the dollar to its lowest level this year
against the euro and a basket of currencies. People tend to hold
the dollar, the most liquid currency in the world, in difficult
times, and vice versa.
"If the fundamentals continue to support the fact that the
worst is now behind us, then the run into the summer could well
yet have more to come on the upside." said Paul Webb, head of
trading at CMC Markets.
TECHNICAL SUPPORT
In the last few days, the FTSEurofirst 300 index has tested
and held technical support on the bottom of its uptrend channel
extending back to early March, now at 868 points. The top of the
channel is currently at 935 points.
"Technically, the market has certainly rebounded to quite an
interesting level," Lawlor said.
The index closed above its 200-day moving average, now at
around 867 points, for a second day in a row on Tuesday,
suggesting a clean break of that technical barrier. It faces
further resistance at the January peak of 895.
A break above that level would trigger a bullish right
triangle formed by the highs and lows in May, and signal a fresh
leg up in the coming months, possibly to 1,023 -- the 38.2
percent retracement of the market's plunge from July 2007.
(Editing by Simon Jessop)
