European shares advance on subsiding debt fears

European shares advance on subsiding debt fears

London: European shares rose on Tuesday, as euro zone finance ministers said they aimed to finalise the details of a plan worth about €750 million to assuage fears that Greece’s debt problems would spread further.

By 6:19pm, the pan-European FTSEurofirst 300 index was up 1% at 1,023.07 points, having slipped 0.1% on Monday.

Meeting in Brussels late on Monday, euro zone finance ministers said they would speedily sort out the details of the plan unveiled a week ago.

Jean-Claude Juncker, Luxembourg prime minister and chairman of the talks, said outstanding issues were “technical" and that ministers hoped to resolve them on Friday when they would return to Brussels to discuss longer-term policy matters.

Banks were among the heaviest sector gainers, with Barclays , HSBC, Societe Generale, BNP Paribas and Deutsche Bank up 1.1 to 4.5%.

“I would see these gains (in equities) as more of a pause than the start of an uptrend. The market has slowly but certainly realised that the problems that Europe has are quite severe," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

Helping to calm investors’ jitters, officials said Greece received a €14.5 billion emergency loan from the EU, and would use some of the money to fully repay a €8.5 billion bond maturing on Wednesday.

Among individual gainers, British Land gained 2.9%, as a rebound in real estate values helped the firm book the first full-year mark-up in its portfolio since the UK property bubble burst.

Broker recommendations also helped selected stocks push higher.

Vallourec rose 4.1% helped by a target price hike by Goldman Sachs following the French seamless tube maker’s first-quarter results last week. The broker also reiterated its “conviction buy" rating on the stock.

Carlsberg added 4.5% after Morgan Stanley raised its rating on the brewer to “overweight" from “equal-weight", forecasting a rise in Russian demand.

ZEW economist Michael Schroeder said the euro zone rescue package would weigh on medium-term growth in Germany as budget cuts reduced demand. Earlier, the ZEW Institute reported that its May German economic sentiment index fell more than expected in May.

Meanwhile, euro zone inflation rose year-on-year as expected in April, and British consumer prices unexpectedly jumped to a 17-month high on rises in tax on alcohol and tobacco, and higher prices for food and women’s clothing.

Across Europe, Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 rose 1 to 1.5%.

Energy shares were higher in Europe, with BP adding 0.9% on optimism it was finding a solution to an oil leak in the Gulf of Mexico.

BG, Royal Dutch Shell, Total and ENI rose 0.6 to 2%, also helped by a rebound in crude prices to around $72 a barrel, from a five-month low in the previous session.