* FTSEurofirst 300 up 0.5 percent
* Glencore sticks to Xstrata bid
* Julius Baer cuts rights issue
By David Brett
LONDON, Aug 21 (Reuters) - European shares rose early on Tuesday in low volumes, rebounding after falls in the previous session as investors awaited a meeting on Greece’s future and possible anti-crisis action European policymakers.
By 0727 GMT, the FTSEurofirst 300 was up 5.45 points, or 0.5 percent, at 1,110.31, having closed 0.5 percent lower on Monday, after a lack of firm news and low volumes caused the market to pause at the top of its August trading range.
“The gains registered by most global equity benchmarks through the central weeks of the (European) summer doldrums have been greeted with understandable scepticism given the still miserable levels of trading volumes,” Ian Williams, equity strategist at Peel Hunt, said.
“(European Central Bank) officials are likely to continue to reiterate the need for constructive action from governments (and)... the point that the details of any intervention have yet to be finalised.”
Greek Prime Minister Antonis Samaras will meet German Chancellor Angela Merkel, French President Francois Hollande and Eurogroup chief Jean-Claude Juncker later this week to try and secure more funding from the EU, International Monetary Fund and ECB, despite falling behind on its debt cut targets.
Britain’s FTSE 100, France’s CAC40 and Germany’s DAX have rallied between 10 and 15 percent in the last three months, with most of the gains registered since late July when ECB president Mario Draghi promised to do whatever it takes to save the euro.
Charles Morris, manager of the HSBC Absolute Return fund, said he has increased exposure to equities to near maximum over the past month, buying cyclical European stocks underpinned by Draghi’s comments and valuations, with plenty of bad news already priced in.
“There are some great firms in Europe including oil firms and industrials which have great global sales,” he said.
Having led the fallers on Monday, cyclical mining and banking stocks were the best performing sectors early on Tuesday.
The sectors still trade at a large discount to the FTSEurofirst on 10.2 times and 9.5 times forward 12-month price-to-earnings, compared with the index on 11.4 times, according to Thomson Reuters data.
Commodities trader Glencore, rose 0.4 percent as it stuck to its guns on a $30 billion bid for miner Xstrata , down 0.8 percent.
Nearly 90 percent of European companies have now reported second quarter earnings. Of those, 51 percent have missed expectations with year-on-year Q2 growth contracting 11.2 percent, according to Thomson Reuters Starmine data.
Swiss private bank Julius Baer rose 2.5 percent after it said it will cut a rights issue to 500 million Swiss francs ($514.69 million) from an originally planned 750 million.
After a significant surge in recent weeks, the euro zone’s blue chip Euro STOXX 50 index has been trading around its long-term descending trendline formed by 2007 and 2011 peaks, which is seen as major a resistance level.
Nomura said the temptation is substantial to book quick profits as investors await further developments from policymakers in around the world.
“There are reasons to believe that in the near term, global equities do need a pause to consolidate recent gains while base-building for further upside in weeks ahead,” the broker said.