European stocks gain as positive earnings cheer

Upbeat earnings from firms such as Zurich and Societe Generale helped drive European stocks up yesterday, but investors quickly bailed out of DaimlerChrysler and other firms who disappointed.

Telecoms added to the positive tone, with Vodafone up despite a source shrugging off talk of a board reshuffle, while Diageo rose after reiterating its targets and Julius Baer rallied on hopes for healthy growth.

By 1645 GMT, the pan-European FTSEurofirst index of 300 leading shares was up 0.5 per cent at an unofficial close of 1,337.9 points, its highest close in four-and-a-half years.

Zurich gained 6.1 per cent after its net profit soared 30 per cent to a record, while SocGen shares added four per cent after posting a forecast-beating 42 per cent rise in fourth-quarter profit.

DaimlerChrysler fell out of investor favour, dropping 3.5 per cent after beating fourth-quarter profit estimates but providing an outlook that was less concrete than some analysts had expected.

Vodafone rallied 3.75 per cent as traders cited speculation of a top-level reshuffle, while an industry source said the talk was untrue.