* FTSEurofirst 300 up 1 percent, Euro STOXX 50 up 1.2 pct
* Rebound seen technical; all eyes on Japan crisis
* UBS analysts see buying opportunities
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, March 17 (Reuters) - European share prices were
higher on Thursday morning, regaining some ground after a 7
percent slide over the past six sessions, but the rebound was
seen as technical as Japan's nuclear plant crisis kept investors
on edge.
At 0935 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1 percent at 1,077.89 points, bouncing
back from a 3-1/2 month low hit on Wednesday on rising fears
Japan's disaster would derail the global economic recovery.
The FTSEurofirst 300, as well as the Euro STOXX 50
<>, UK's FTSE 100 <>, Germany's DAX index <>
and France's CAC 40 <> were all deep in 'oversold
territory' on Thursday before the bell, with their relative
strength index (RSI) below 30, pointing toward a technical
rebound.
U.S. stocks dropped 2 percent on Wednesday, with the S&P
<.SPX> and Nasdaq <> turning negative for the year, while
Japanese stocks <> resumed their slide and the yen surged
to a record high against the dollar.
"The drop has been violent, but the newsflow remains very
alarming. There is short covering at this point, and we continue
to see outflows," said David Thebault, head of quantitative
sales trading, at Global Equities, in Paris.
"Stocks might look oversold on the short term, but they are
not if we're heading into a bear market. The Japanese crisis
could have severe consequences for the global economy. Just
think about divestment from Asian central banks and investors,
that's the real fear here."
On Thursday Japanese military helicopters dumped water on
the overheating nuclear plant, while the top U.S. nuclear
regulator warned that the cooling pool for spent fuel rods at
reactor No.4 may have run dry and another was leaking.
The country could be heading back into recession, with
trillions of yen wiped off share markets and a surging yen
currency squeezing the key export sector, adding to fears over
supply chain disruptions. []
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Japan disaster Top News page []
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Heavyweight mining stocks featured among the biggest
gainers, with BHP Billiton <BLT.L> up 2.4 percent and Xstrata
<XTA.L> up 1.8 percent. But the Stoxx 600 Europe basic resources
index <.SXPP> is still down 12 percent in 2011, Europe's worst
sector performance so far this year.
Around Europe, UK's FTSE 100 index <> was up 0.9
percent, Germany's DAX index <> up 1.1 percent, and
France's CAC 40 <> up 1.1 percent.
"This has been a shock to the system and investors have
become very emotional. But our quant model so far is telling us
this isn't the start of a new regime, the world economy is not
going into a double-dip recession," said Hans-Olov Bornemann,
head of the global quant team and senior portfolio manager at
SEB Asset Management, in Stockholm.
"We're still long equities, although we've reduced our
exposure, and we're still short on bonds. The market has already
priced in pretty bad scenarios, but the global recovery story is
still intact," said Bornemann, whose SEB Selection Asset Fund
manages 1.37 billion euros.
After screening through the beaten-down European stocks, UBS
analysts said stocks with limited exposure to Japan have been
"unjustifiably" oversold and represent "attractive buying
opportunities."
"Although risks are ongoing, European equities now trade on
single-digit multiples --9.4 times 2012 expected earnings. We
see value," they said in a note.
"Back in the mid-1990s, 2.5 percent of Eurozone exports went
to Japan; now it is 1 percent. For corporates, we estimate that
sales to Japan generate around 3 percent of total revenues
--ex-financials--, although of course for some sectors, such as
luxury goods, the figure is materially higher."
(Editing by Greg Mahlich)
