Eurozone stocks edge higher

Paris - Investors bought peripheral eurozone stocks on Thursday, pushing bourses in Madrid, Milan and Lisbon to outperform northern peers again as confidence grows in Southern Europe's struggling economies.

Overall, pan-European indexes inched higher, although investors were reluctant to make big bets before a European Central Bank policy meeting later in the day.

The FTSEurofirst 300 index of top European shares was up 0.3% at 1 325.59 points on Thursday morning, while the euro zone's blue-chip Euro STOXX 50 index was up 0.6% at 3 128.54 points, with both indexes trading at levels not seen in more than five years.

The positive trend was stronger in the euro zone periphery. Spain's IBEX, Italy's FTSE MIB and Ireland's ISEQ rose 1.1-1.4%, while Portugal's PSI 20 added to recent sharp gains, up 0.5%. 

Bailout

FXCM analyst Vincent Ganne said: "The momentum is clearly in the peripheral markets...that's where investment flows are going,

"Investors are doing arbitrage between the core and the periphery, using pairs trade coupling a short position on the DAX or CAC for instance and a long position on the IBEX or MIB."

Bumper demand seen this week for Ireland's first bond sale since it exited its EU/IMF bailout has helped push down euro zone government bond yields and lifted expectations that Portugal will be able to exit its EU/IMF bailout programme this year as planned.

Elsewhere in Europe, Britain's FTSE 100 index was up 0.3%, Germany's DAX index up 0.4% and France's CAC 40 up 0.3%.