European shares edge higher

London - European shares turned positive in morning trading on Wednesday, helped by some encouraging broker upgrades, with Switzerland's SMI equity index hitting the 9 000-point mark for the first time since late 2007.

Prudential rose 1.1% to lead insurers after Deutsche Bank increased its target price for the stock to 1 680 pence from 1 630 pence. AstraZeneca was up 1.4%, helping the European healthcare index after Natixis raised its price target for the stock.

At 12:50, the FTSEurofirst 300 index of top European shares was up 0.2% at 1 362.84 points after falling to a low of 1 355.67 earlier in the session.

The Swiss SMI index rose 0.2% to 8 991.02 points after reaching an intra-day high of 9 001.84 points. It has gained nearly 10% so far this year, outpacing all European major stock indexes including Germany's DAX, down 0.7% over the same period.

"If you talk about flight to safety, the Swiss market is one of the main beneficiaries of that as it has got big defensive companies like Roche and Novartis. And Swiss franc is a relatively stable currency," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said.

"In the short term this trend is likely to continue."

Gains recorded by the broader market, however, were capped by a sharp decline in mining shares, dragged by a steep fall in iron ore prices.

Rio Tinto fell 1.4% and BHP Billiton shed 1.2% after China's iron ore futures dropped nearly 5% to a record low on Wednesday, raising pressure on spot prices which have slumped to their weakest in more than five years, hurt by a supply glut.

"There's been no pause in the sell-off in commodity prices, which drags the shares of all the basic resources companies," Talence Gestion fund manager Alexandre Le Drogoff said.

The STOXX Europe Basic Resources index fell 0.7%, the worst sectoral performer in Europe.

Among other movers, Areva tumbled 15% after suspending its 2015 and 2016 financial targets, blaming delays in a Finnish atomic project, the slow restart of Japan's reactors and a lacklustre nuclear market.

UK testing firm Intertek featured among the top losers, down 6.9% after a disappointing trading update.