* FTSEurofirst 300 index steadies by midday trade
* Euro Stoxx 50 (Zurich: ^STOXX50E - news) flat, support seen at 2,750 points
* Ryanair jumps after forecast-beating results
By Atul Prakash
LONDON, May 20 (Reuters) - European shares held steady on
Monday after touching a new five-year high, with positive data
from the United States and Japan pointing to an improving global
economic outlook, boosting the market's near-term sentiment.
The downside to the recent positive U.S. data, however, is
that the Federal Reserve, the U.S. central bank, could decide in
response to scale back its monetary stimulus - one of the
biggest drivers of the market's recent rally.
Cyclical stocks that typically gain on improvements in
economic activity rose on Monday.
But miners came under pressure following a drop in oil and
metals prices on concerns that any change in U.S. monetary
policy could hurt global demand for raw materials. The STOXX
Europe 600 Basic Resources (Xetra: A0JC0X - news) index fell 1.3 percent.
The losses in mining and energy stocks, which were
down 0.6 percent, were offset by cyclical sectors such as autos
and travel, up 2.1 percent and 0.8 percent
respectively.
That left the FTSEurofirst 300 index flat at
1,247.79 points at 1108 GMT, after earlier touching 1,250.91,
its highest since mid-2008.
The euro zone's blue chip Euro STOXX 50 was flat
at 2,817.74 points. Charts show the index has broken out of a
three-month sideways range and stayed in a short-term uptrend,
underpinned around its March peak of 2,750. Its 14-day relative
strength index (RSI) of 70 shows it has moved into "overbought"
territory but is still poised for more gains.
"A higher RSI worries me only when you get a negative
divergence or when the market rallies up but with less momentum.
Bias is definitely on the upside in the near term," Dominic
Hawker, technical analyst at Westhouse Securities, said.
"I would regard any consolidation from an 'overbought'
position as a buying opportunity," he said, adding that the
index's next target was 3,000.
J.P.Morgan Cazenove said it was sticking to its call that
markets will not see the typical seasonal weakness this time
around and expected them to continue grinding higher.
Equities were helped by encouraging data. Friday's figures
showed U.S. consumer sentiment rose to the highest in nearly six
years, while a gauge of future economic activity rose to a near
five-year high. On Monday, Japan raised its assessment of the
country's economy.
"We have started to see a series of positive readings
coming out of the United States. We are positioned for a rising
market and think that the best way is to invest in financials,"
Robert Parkes, equity strategist at HSBC Securities, said.
Among sharp movers, budget airline Ryanair led the
travel and leisure sector by jumping 7.9 percent after posting
forecast-beating full-year earnings.
