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European shares rise for third day, boosted by BP

European shares rise for third day, boosted by BP
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First Published: Fri, Jun 11 2010. 02 37 PM IST
Updated: Fri, Jun 11 2010. 02 37 PM IST
London: European shares edged higher on Friday, rising for the third day on optimism over global growth, while BP recovered on hopes it dividend might be deferred rather than cut as it continued battling an oil spill.
By 2:15pm, the pan-European FTSEurofirst 300 index of top shares was up 0.4% at 1,017.93 points. The index is down around 8.6% from a mid-April peak on concerns about the euro zone debt crisis.
British energy group BP gained 5.9% following recent sharp losses on hopes its dividend might be deferred rather than cut.
The Wall Street Journal reported the British oil company was considering deferring or reducing its second quarter dividend to help quell the political uproar in the United States over the environmental disaster caused by the massive spill.
British newspapers also rounded on US President Barack Obama over his criticism of the company.
However, analysts suggested rises in BP shares could be limited. US government scientists doubled their estimate of the amount of oil gushing out of its ruptured Gulf of Mexico well. The stock is still down 43% since the oil spill started mid-April.
“BP is just a high beta trade and if investors want to take more risk then they will invest in the stock as it will go higher than the rest,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
“European shares are modestly higher given a strong rebound in Asia. I think it is a bear market rally as the sovereign debt problems can not be solved in a couple of days.”
Banks added to the previous session gains on the global growth optimism. Banco Santander, BNP Paribas and UBS rose 1.6 to 2.6%.
Novartis gains
Drugmakers featured among the top performers. Novartis gained 2.3% after its multiple sclerosis pill Gilenia won strong backing from a US advisory panel.
On the downside, the mining sector featured among the worse performers. Australian Prime Minister Kevin Rudd denied on Friday talk of a swift deal with miners over his controversial mining tax, as global miner BHP Billiton rejected a rumoured compromise affecting the nation’s top export sector.
Anglo American and Rio Tinto fell 0.6 and 1.1% respectively.
Across Europe, the FTSE 100 index was up 0.1%, Germany’s DAX was down 0.2% and France’s CAC 40 was up 0.3%.
Spain’s IBEX 35 gained 1.8%, Portugal’s PSI 20 rose 0.4% and Italy’s benchmark was up 0.3%.
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First Published: Fri, Jun 11 2010. 02 37 PM IST
More Topics: Markets | Europe | Stocks | Debts | BP |