European stocks edge up as banks offset weak oils

European shares were slightly higher midday yesterday, adding to a two-session winning run as details of the impact of the credit crisis on Deutsche Bank reassured investors and fuelled a rally in banks.

But retreating energy and telecoms shares limited the gains. At 1051 GMT, the FTSEurofirst 300 index of top European shares was up 0.15 per cent at 1,570.58 points.

Shares in financial institutions added to recent gains as investors were relieved by greater clarity on the impact of the squeeze in the credit markets on banks' results.

Deutsche Bank, which said it expected net profit to rise to more than $2 billion in the third quarter, despite more than $3 billion in write-downs in the wake of global credit market turmoil, gained nearly three per cent.

The news followed profit warnings by Swiss bank UBS and Citigroup earlier this week, as both banks have been hit by the global credit crisis.

"People were expecting very, very bad news, so it's a relief rally," said Arthur van Slooten, strategist at Societe Generale, in Paris.