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European shares rise as oils gain

European shares rise as oils gain
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First Published: Fri, Aug 14 2009. 03 09 PM IST
Updated: Fri, Aug 14 2009. 03 09 PM IST
London: European shares rose in early trade on Friday, helped by gains overnight in Asia and the United States, with energy companies among the biggest gainers as hopes of a global economic rebound remained intact.
At 2:00pm, the FTSEurofirst 300 index of top European shares was up 0.4% at 952.00 points.
Energy companies were among the early gainers, as crude prices edged up towards $71 a barrel, on global economic recovery hopes.
Total, BP, Royal Dutch Shell and StatoilHydro rose between 1 and 1.5%. Analysts said the market remained positive after France and Germany surprisingly reported a return to growth on Thursday, and the Federal Reserve’s reassuring statement on Wednesday. “There’s still an ongoing reaction to Wednesday’s statement from the Fed that the economy is stabilising,” said Bernard McAlinden, investment strategist at NCB Stockbrokers, in Dublin.
He added that weak US retail sales data on Thursday could yet take its toll on the market, depending on confidence data from the University of Michigan, due at 7:30pm.
Banks continued to gain, boosted by hedge fund manager John Paulson buying stakes in their US counterparts, such as Bank of America.
BNP Paribas, Banco Santander, Barclays, and UBS were up between 1 and 1.6%.
Allied Irish Banks was 9.3% higher after the Irish Times reported that a Canadian bank had approached it and the Irish government with a proposal to buy a stake in Allied when it has been cleansed of its risky loans. A spokeswoman for Allied Irish Banks declined to comment.
The DJ Stoxx Index of European Banks is up more than 157% from its low of 9 March.
With copper at 10-month highs, miners rose. Anglo American, Antofagasta, Rio Tinto, Vedanta Resources and Xstrata rose between 2.8 and 4.4%.
Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC-40 were up between 0.5 and 0.7%.
Volkswagen was down 3.8%, while Porsche was up 10%. Late on Thursday, VW agreed to buy a 42% stake in the sports car unit of debt-ridden Porsche, another step toward combining the two German carmakers into a European automotive giant.
Among other individual stock movements, Swatch Group, the world’s largest watchmaker, rose 9.8% after saying it expects demand to pick up in the second half, while reporting first-half net profit that beat forecasts.
The European benchmark index is up more than 47% from its lifetime low of 9 March, as investors have become more confident on the prospects of recovery.
The index is on track for its highest close in more than nine months, and to notch up a slight gain for the week, which would be its fifth straight week in positive territory.
Inflation data for the euro zone is due at 0900 GMT.
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First Published: Fri, Aug 14 2009. 03 09 PM IST
More Topics: Markets | Europe | Stocks | Banks | Oil |