European shares rise after two-day slide

European shares rise after two-day slide
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First Published: Thu, Apr 29 2010. 02 52 PM IST
Updated: Thu, Apr 29 2010. 02 52 PM IST
London: European shares rose in early trade on Thursday, lifted by a raft of mostly positive earnings and word from the US Federal Reserve it would keep rates near zero for an extended period.
However, worries remained about downgrades to euro zone sovereign debt.
At 2:14pm, the FTSEurofirst 300 index of top European shares was up 0.7% at 1,064.38 points.
This followed a decline of 4.2% over the previous two sessions, after Standard & Poor’s cut debt ratings for Greece, Portugal and Spain.
Banks were mostly higher. BNP Paribas, Barclays, Deutsche Bank, HSBC and Standard Chartered rose between 1.2 and 2.1%.
Banco Santander rose 4% after its first-quarter results beat forecasts. Greek banks rose 8% on optimism that an aid package from the European Union and International Monetary Fund would be delivered in time to prevent Greece defaulting on its debt.
However, oil major and index heavyweight BP fell 1.7% after it discovered an additional leak at an oil spill in the Gulf of Mexico.
BG and Repsol, up 1.8 and 2.7% respectively after first-quarter earnings, helped to keep the energy sector positive. “There was a mild positive for markets, as there was a slight chance the Fed would change something,” said Bernard McAlinden, investment strategist at NCB Stockbrokers.
“But there could be more of a correction. There are some signs of urgency for the Greek aid package, but the conditions are not yet known, so there was only a little relief there.”
“The overwhelmingly positive thing is that earnings are coming through.”
Across Europe, Britain’s FTSE 100, Germany’s DAX, France’s CAC40 and Spain’s IBEX 35 rose between 0.3 and 2%.
The FTSEurofirst 300 index is up more than 64% from its lifetime low of March 9, 2009.
Among other individual companies reporting earnings, consumer goods giant Unilever rose 3.1% after beating forecasts with a 4.1% rise in first-quarter underlying sales. German industrial conglomerate Siemens was up 1% following a raised profit outlook on the back of cost cuts and a strong recovery in products sensitive to economic swings.
French drinks group Pernod Ricard gained 4%, pleasing the market with a raised full-year profit target and third-quarter sales above forecasts.
But Germany’s BASF fell 2.9% on profit-taking after it surpassed analysts’ earnings expectations for the fifth straight quarter as it became the latest chemical maker to be shored up by demand from Asia.
Investors will look at weekly US jobless data, due at 6:00pm, for clues on the strength of the recovery in the world’s biggest economy.
US stocks rose on Wednesday after the Federal Reserve said it would keep interest rates low for an extended period, and pointed to signs of strength in the economy.
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First Published: Thu, Apr 29 2010. 02 52 PM IST
More Topics: Markets | Europe | Stocks | Debts | Greece |