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European stocks climb, led by oils, techs

Published 06/09/2009, 06:57 AM
Updated 06/09/2009, 07:10 AM
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* FTSEurofirst up 0.3 percent, pares gains after German data

* Oils advance on strong crude

* Techs buoyed by Texas Instruments' raised outlook

* For up-to-the-minute market news, click on

By Brian Gorman

LONDON, June 9 (Reuters) - European stocks were higher at midday on Tuesday, led by energy companies as crude prices rose to $69 a barrel, and technology firms gaining from Texas Instruments' upbeat outlook.

At 1045 GMT, the FTSEurofirst 300 index of top European shares was up 0.3 percent at 867.46 points, down from a high of 875.75 after gloomy German macroeconomic data.

The index fell 0.8 percent on Monday, but is up more than 34 percent from the lifetime low it hit on March 9. German industrial production fell unexpectedly by 1.9 percent month-on-month in April, hit by a sharp fall in capital goods output, the Economy Ministry said.

German exports resumed their slide in April and imports fell even more sharply, tempering hopes that Europe's largest economy will soon recover from its deepest recession since World War Two.

"The market is taking a bit of a breather," said Georgina Taylor, equity strategist, Legal & General Investment Management in London. "The data has been mixed, with German industrial production worse than expected.

"We're past that stage of all news being good news. We need to sit back and reassess how strong the recovery is going to be, how quick it is going to be."

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Oil was hovering around $69 a barrel, just below its highest in seven months, as the dollar retreated and ahead of weekly stocks data forecast to show a fall in U.S. crude inventories.

BP gained 1.5 percent, while ENI, Royal Dutch Shell and Total rose between 0.7 and 1.1 percent.

Tech stocks got a boost from U.S. firm Texas Instruments, which raised its targets for second-quarter earnings and revenue, signalling improving demand in the chip market.

Index heavyweight Nokia climbed 3.9 percent, while STMicroelectronics and Alcatel-Lucent added 3.7 and 1.7 percent, respectively.

We expect other companies to also beat their initial guidance when they report their second-quarter revenues in July," Credit Suisse analysts wrote in a note.

U.S. FUTURES FALL

Wall Street was set for a lower open. Futures for the Dow Jones, S&P 500 and Nasdaq were flat to down 0.3 percent. "The Spring rally has produced a big gap in valuations between cyclicals and defensives. But the market is now heading into a consolidation phase, and we should see a rotation in favour of utilities, healthcare and the likes," said Jacques Henry, analyst at Louis Capital Markets, in Paris.

Around Europe, Britain's FTSE 100 index was down 0.1 percent, Germany's DAX index was 0.2 percent lower and France's CAC 40 was up 0.03 percent.

French electrical components firm Legrand gained 3.8 percent after UBS upgraded its rating on the stock to "buy" from "neutral", while food group Danone, upgraded to "overweight" from "equal weight" by Morgan Stanley, rose 3.8 percent.

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Banking shares were on the rise, led by Lloyds Banking Group , up 2.6 percent, regaining some of the ground it lost on Monday. The lender will close all branches of its Cheltenham & Gloucester mortgage unit and cut some 1,500 jobs.

Spain's Banco Santander was up 1.6 percent, and Credit Suisse rose 0.9 percent.

Air France-KLM was 3.8 percent lower, down for a fifth day, after Europe's biggest airline unveiled an 8.1 percent drop in passenger traffic in May, and after RBS cut its rating on the stock to "hold" from "buy". (Additional reporting by Blaise Robinson; editing by Simon Jessop)

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