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Europe stocks gain; banks, miners higher

Published 08/13/2009, 06:57 AM
Updated 08/13/2009, 07:03 AM
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BARC
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* FTSEurofirst 300 index up 1.1 percent

* Banks gain; insurer Prudential up

* Anheuser-Busch InBev falls

By Joanne Frearson

LONDON, Aug 13 (Reuters) - European shares were higher near midday on Thursday, boosted by the release of stronger-than-expected French, German and euro zone macro data and overnight comments from the U.S. Federal Reserve, with banks and miners the biggest gainers.

Banks added the most points to the index, with Barclays, UBS , UniCredit, HSBC and Deutsche Bank all up between 1.5 and 5.1 percent.

Among other financials, Britain's biggest insurer, Prudential, climbed 8.3 percent after it reported stronger-than-expected half-year profits and raised its interim dividend.

By 1039 GMT, the pan-European FTSEurofirst 300 index of top shares was up 1.1 percent at 952.07 points after touching a nine-month high of 952.66 points.

"Both the Bank of England and the Federal Reserve made the point interest rates are going to remain at exceptional low levels for a long period of time, in spite of improving news flow," said Mike Lenhoff, strategist at Brewin Dolphin.

"I think this is a powerful message for the market ... positive news flow should lead to upgrades ... and interest rates are unlikely to change until a sturdy enough recovery is built, so (as) not to relapse back into recession," he said.

Germany and France achieved a shock return to economic growth in the second quarter of the year, ending their recessions earlier than many policymakers and economists expected.

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Meanwhile, the euro zone economy shrank less than expected in the second quarter, data showed, adding to signs the worst of the recession could be over.

Miners tracked metal prices higher, with copper up 2.6 percent, aluminium gaining 3.7 percent and nickel surging 5.5 percent.

Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata were up 3.8-5.6 percent.

ANHEUSER-BUSCH INBEV FALLS

On the downside, Anheuser-Busch InBev slipped 3.7 percent after it said the second half of the year would be significantly weaker. The company reported second-quarter profit above analyst forecasts.

Dutch insurer Aegon fell 6.6 percent after it reported a surprise second-quarter loss and said it would sell up to 1 billion euros ($1.41 billion) in stock to partially repay aid it received from the Dutch state.

"Overall market sentiment is pretty positive," said Koen De Leus, economist at KBC Securities.

"What is very surprising today is that the German economy is growing and that's a big help for the market, but the most important thing today is going to be the retail sales figures in the United States."

Investors await U.S. retail sales data for July, due at 1230 GMT. Economists in a Reuters survey expect a 0.7 percent rise, compared with a 0.6 percent rise in June.

Across Europe, the FTSE 100 index was up 1.1 percent, Germany's DAX was 1.4 percent higher and France's CAC 40 was up 1 percent. (Additional reporting by Atul Prakash; editing by Simon Jessop)

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