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European shares rise as firmer miners offset Brexit, HSBC concerns

Reuters - UK Focus

* Firmer mining stocks help European shares rise

* HSBC lower after results

* Telecom Italia (Other OTC: TIAJF - news) up on Vivendi (Swiss: VIV.SW - news) move (Adds details, updates prices)

By Danilo Masoni

MILAN, Feb 22 (Reuters) - European stocks rose on Monday as firmer mining company shares helped to offset concerns about Britain's potential exit from the European Union and a fall in HSBC's shares.

The pan-European FTSEurofirst 300 index gained 1.7 percent going into the close of the trading session, though it is still down nearly 10 percent since the start of 2016 due to concerns about a global economic slowdown.

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Britain's FTSE 100 (NasdaqGS: Z - news) was up 1.8 percent, while Germany's DAX gained 1.9 percent and France's CAC rose 1.8 percent.

Mining stocks were among the best performers, with Anglo American rising 9 percent, as the price of copper reached a two-week high.

Metals prices were boosted after an uptick in China's steel industry raised the prospect of a revival in metals demand, given China's role as the world's biggest consumer of metals.

Shares (Berlin: DI6.BE - news) in Telecom Italia also advanced after Vivendi increased its stake in Telecom Italia to 22.8 percent, strengthening its position as the top shareholder.

However, shares in HSBC slipped 0.7 percent after Europe's biggest bank reported a surprise pre-tax loss of $858 million and predicted a 'bumpier' financial environment ahead.

Analysts also cited uncertainty over Britain's June 23 referendum on whether to leave the European Union - dubbed "Brexit" - as hitting other British stocks, with UK property stocks falling due to concerns that a vote to leave the EU could impact demand for London homes from foreign buyers.

Currency traders also hit sterling, homing in on narrowing bookmaker odds on a Brexit.

The scale of the reaction on sterling, an almost 2 percent fall driven chiefly by the decision of London Mayor Boris Johnson to join the "out" camp on Sunday, also sent British government bond prices spiralling lower.

"A Brexit would be worse for the UK than for Europe," said Andrea Williams, European equities fund manager at Royal London Asset Management.

However, analysts at Societe Generale (Swiss: 519928.SW - news) said any decision by Britain to leave would be just as harmful for the rest of the EU as it would be for Britain.

"Our own view falls in the very negative camp, with an estimated loss of 0.5-1.0 percentage points per annum to the UK and 0.125-0.25 percentage points for the euro area over a decade. Given that potential growth is estimated at only 1.2 percentage points, a Brexit would be a significant shock to the euro area economy!" SocGen (Paris: FR0000130809 - news) wrote in a note.

Today's European research round-up (Additional reporting by Sudip Kar-Gupta; Editing by Gareth Jones)