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European shares up led by oils, banks; Volvo drops

European shares up led by oils, banks; Volvo drops
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First Published: Fri, Apr 24 2009. 03 24 PM IST
Updated: Fri, Apr 24 2009. 03 24 PM IST
Frankfurt: European shares rose in morning trade on Friday, led by energy and financial stocks, but Volvo fell sharply after the No.2 truck maker reported a bigger-than-expected first-quarter loss.
At 2:45pm, the FTSEurofirst 300 index of top European shares was up 0.3% at 794.37 points.
Europe’s stock markets were buoyed by Wall Street’s higher close on Thursday and by a stronger-than-expected April reading for the Ifo indicator of corporate sentiment in Germany, Europe’s biggest economy and the world’s top exporter.
“Again overnight we got quite supportive figures from the US,” said UniCredit equity strategist Tammo Greetfeld.
“The Ifo numbers are quite supportive for the market and are paving the way for some moderation of the downward earnings revisions over the coming months,” he said.
Oil and gas stocks added most points to the European benchmark index as the crude oil price strengthened over 0.5% to almost $50 a barrel.
ENI, which reported a smaller-than-expected fall in first-quarter profits, was up 3.9%, Total put on 2.5%, BP traded 1.8% higher and Royal Dutch Shell gained 1.7%.
Among financials, Credit Suisse was up 3.5%, BNP Paribas added 3% and Barclays rose 2.7%.
Cazenove on Friday upgraded its recommendation on Credit Suisse to “in-line” after the Swiss bank’s better than expected quarterly earnings on Thursday.
It said in a note: “Many competitors have fared worse and the perception of Credit Suisse’s ‘fortress´ balance sheet is benefiting both the Wealth Management and Investment Banking businesses.”
Underpinning Wall Street on Thursday were earnings from some big US regional banks, including PNC Financial Services Group Inc and Fifth Third Bancorp, which provided some glimmers of hope.
Shares in American Express rose as much as 6% in extended trading on Thursday after the credit card company reported better-than-expected earnings as it slashed costs and said it intended to repay government bailout funds as soon as regulators allow.
Outside financials, Nokia fell 5.5% as the mobile-phone maker traded ex-dividend. The DJ Stoxx technology index was the leading sectoral loser, down 2.4%.
Volvo fell 4.1% after the company reported a first-quarter operating loss that was deeper than expected and cut its market outlook, forecasting a huge contraction in demand on both sides of the Atlantic.
Shares in Volvo’s Swedish rival Scania fell 1.7%.
The benchmark index rose 26 percent between 9 March and 17 April. The DJ Stoxx banks index gained 88% in the same period.
The focus later in the day will be on US corporate earnings from such companies as Ford and 3M, and on economic data, particularly for US durable goods orders, which will be released at 6:00pm today.
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First Published: Fri, Apr 24 2009. 03 24 PM IST
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