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  • bluecheese4u bluecheese4u Mar 11, 2008 7:12 AM Flag

    Oils, banks help Europe shares higher; Nokia falls

    Oils, banks help Europe shares higher; Nokia falls

    Reuters, Tuesday March 11 2008 By Sitaraman Shankar
    LONDON, March 11 (Reuters) - European shares rose in volatile early trade on Tuesday, driven by gains in oil shares and banks, with Vodafone lifted by positive brokerage comment from Goldman Sachs.
    The gains more than offset weakness in technology stocks on pricing concerns and miners hurt by persistent recession fears.
    At 0945 GMT the FTSEurofirst 300 index of top European shares was up 0.9 percent at 1,265.75 points, having fallen 0.1 percent earlier.
    Goldman Sachs added Vodafone to its "conviction buy" list, lifting the stock 3 percent and making it the top weighted gainer on the FTSEurofirst index.
    Among banks, HSBC gained 2.4 percent, Royal Bank of Scotland 2.4 percent and ING 2.2 percent.
    But European aerospace group EADS fell 3.4 percent after it posted a worse-than-expected 2007 net loss, while Nokia and other tech stocks slipped after Texas Instruments cut its first-quarter forecasts citing a weak market.
    Nokia fell 5 percent, Infineon lost 0.8 percent and STMicroelectronics slipped 1.3 percent.
    The FTSEurofirst 300 index has fallen 16 percent so far this year, led by financials which have tumbled on fears of writedowns linked to credit market losses stemming from a meltdown in U.S. subprime mortgages.
    Strategists said that the macroeconomic picture would dominate, with the U.S. Federal Reserve widely expected to cut interest rates again next Tuesday, and then the focus would shift to updates from major U.S. investment banks.
    "The Fed will probably cut by 50 basis points, but people will be interested in hearing their comments on the crisis in the banking sector," said Thierry Lacraz, strategist at Swiss bank Pictet.
    "The main fear in the market still surrounds the real situation around bank balance sheets, and the mood is deeply dubious about what banks will report for the first quarter."
    Goldman Sachs, Lehman Brothers, Morgan Stanley and Bear Stearns are all due to report over the next ten days.
    Heavyweight oil stocks gained as crude stayed close to its record of just over $108 a barrel. BP gained 2 percent, while Total and Shell gained more than 1 percent.
    Index heavyweight Vodafone rose 2.7 percent, making the stock the top index points contributor on the pan-European benchmark.
    "We are adding Vodafone to the conviction buy list following a period of stock price weakness. We expect Vodafone to continue to benefit from growth in wireless data without an offsetting risk of exposure to incumbent wireless assets," Goldman analysts said in a note.
    Other gainers included Cadbury Schweppes, which rose 4.8 percent after the confectionery group set May 7 as the date to demerge its North American soft drinks business after market talk the group might have to delay the spin-off.
    Belgian-Dutch financial group Fortis rose 2.5 percent after Web site El Confidential said Santander and several sovereign wealth funds were among candidates who may inject up to 2 billion euros in Fortis.
    Santander and Fortis declined comment.
    Around Europe, Britain's FTSE 100 was up 1.1 percent, Germany's DAX was up 0.6 percent and France's CAC was 1.1 percent higher.

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