BUZZ-Hedge funds buyers of European resources stocks, long-only stays away

** Hedge fund buying of European resources stocks fuelling a rally in a sector where earnings revisions remain negative

** Lack of earnings keeping long-only managers at bay

** EPS revisions in the sector could be a trigger for long-only to join the buying, trader adds. Chart: http://link.reuters.com/weg24w

** Since broadly positive Rio Tinto (Xetra: 855018 - news) results on Feb. 12, Stoxx 600 Basic Resources sector has rallied 7.8 pct v 2.1 pct for the Stoxx 600, has also beaten the broader index YTD

** BAML says resources among most under owned sectors with clients, also relatively undervalued. Chart: http://link.reuters.com/xaf24w

** Trader at another top-tier bank says materials stocks second-largest buy concentration amongst hedge fund clients, with long-only managers still selling the sector

** Rotation within the sector also evident, with money coming out of quality names and into stocks with more short interest

** Vedanta and Antofagasta (Other OTC: ANFGF - news) among top performers in the sector post Rio results, both with elevated short bases

** In steels, ArcelorMittal (LSE: 0NSF.L - news) (41 pct short interest per Markit (NasdaqGS: MRKT - news) ) up 9.6 pct since results on Feb. 13, with ThyssenKrupp (Swiss: TK.SW - news) (9 pct short interest) down 3.6 pct (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)