London: European shares rose on Friday morning as positive data from China helped lift investor spirits, while Novartis gained after it made its first batch of H1N1 vaccine ahead of expectations.
By 2:17pm, the pan-European FTSEurofirst 300 was up 0.1% at 888.72 points. The index has risen around 37% since reaching a low in early March.
“Last night we got better than expected Chinese data, following better than expected US data yesterday ... We are getting a view that we can come out of the recession and have a reasonable degree of economic recovery globally,” said Bernard McAlinden, market strategist at NCB Stockbrokers.
China’s May factory output rose more than forecast and retail sales growth accelerated, giving new impetus to investor hopes the world’s third-largest economy can lead a global revival. On Thursday data showed sales at US retailers rose in May for the first time in three months, and the number of workers filing new applications for jobless benefits fell for a fourth straight week last week.
Drugmakers were the biggest gainers with Novartis up 1.9% after saying it had produced a first batch of a vaccine to fight the H1N1 flu outbreak, which will start clinical trials in July. The company said it expects to be able to ramp up manufacture rapidly. GlaxoSmithKline, AstraZeneca and Sanofi-Aventis were 0.8 to 2.8 percent higher.
Across Europe, the FTSE 100 index was up 0.04%, Germany’s DAX was down 0.2% and France’s CAC 40 was up 0.03%.
Banks reverse earlier losses
Banks recovered from earlier losses as Deutsche Bank said most European banks would pass a “stress test”, although stocks within the sector were mixed.
BNP Paribas, UBS, Royal Bank of Scotland were up 0.9 to 4%.
British bank Barclays lost 1.5% after agreeing to sell its investment arm BGI for $13.5 billion.
Energy stocks were lower as crude slid towards $72 a barrel, as investors locked in gains from a near eight-month high settlement a day ago. Cairn Energy, Tullow Oil, Royal Dutch Shell and Total were down 0.3 to 1.4%.
Miners were in the doldrums as copper fell 1.3%. Vedanta Resources dropped 5% after the group launched a $1.0 billion convertible bond issue, partly to help finance takeovers and to boost ownership of subsidiaries.
Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata were down 0.6 to 2.6%.
Later in the session, investors may focus on the G8 finance minsters meeting in Italy.
“The finance meeting will be interesting to see what leads it may provide. There is still obviously the concern of potential contagion coming out of eastern Europe and whether we are getting any stability, though I do get the impression there is some,” said Justin Urquhart Stewart, director at Seven Investment.