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European shares up in early trade; banks, commods up

Published 06/19/2009, 04:57 AM
Updated 06/19/2009, 05:00 AM
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* FTSEurofirst 300 rises 0.7 percent

* Oils, miners, banks, higher

* "Triple witching" expiry of stock futures and options

By Brian Gorman

LONDON, June 19 (Reuters) - European shares were up in early trade on Friday, with energy and mining shares rising on strong commodities prices, banks higher, and following U.S. gains after data pointed to economic recovery. At 0845 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 856.93 points, after gaining 0.6 percent on Thursday. The European benchmark index is up 33 percent from the lifetime low hit on March 9, as investors have become more confident on prospects for economic recovery.

U.S. shares rallied on Thursday, breaking a three-day losing streak, as data on the job market, regional manufacturing and an index of leading indicators revived hopes the recession-hit economy was stabilising.

"The Conference Board leading indicators flashed an end-of-recession signal," said Davy stockbrokers in a note. "It has never fired a false signal before and this time is unlikely to prove any different.

"The question now is pinpointing the exact month of the trough. For equity markets, the timing of that recession end is important."

The heavyweight banking sector helped to drive the index higher. Barclays, Commerzbank, Credit Suisse, Societe Generale and UniCredit rose 0.5-2.3 percent.

Commerzbank was among the shares that will go back into the FTSEurofirst 300 on Monday, after a strong run.

Insurers were higher, helped by a positive sector note from Deutsche Bank. The broker upgraded price targets for Aviva and Axa, which rose 5.1 and 1 percent respectively. With gold slightly higher and copper slightly lower, mining shares were up. Anglo American, BHP Billiton, Lonmin, Rio Tinto and Xstrata rose between 1 and 4.6 percent.

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Crude oil futures for August were up 0.8 percent at more than $72, on economic optimism, boosting energy shares.

BP and StatoilHydro were up 0.8 and 0.5 percent respectively.

PORSCHE FALLS Autos were lower. German Porsche fell 0.7 percent after it reported pretax profit at its core sports car business declined on the back of a sharp drop in vehicle sales and revenue for the first nine months of the fiscal year.

Daimler and Volkswagen fell 1.3 and 2.2 percent respectively.

Across Europe, Britain's FTSE 100 and France's CAC-40 were up 1.1 and 0.6 percent respectively; Germany's DAX was up 0.1 percent.

In a thin day for corporate announcements and macroeconomic data, investors may be cautious ahead of the "triple witching" expiry of stock index futures, stock index options and single stock options. (Editing by Dan Lalor)

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