Tesco, BG and Repsol boost European shares

European shares rose yesterday after five days of losses, buoyed by gains in food retailers after Tesco delivered upbeat results and in energy stocks, which rallied as oil hit record highs.

Also helping the oil sector was an offshore find by Repsol and BG Group along with Brazil's Petrobras that may be the largest in 30 years, while Tesco rose 7.1 per cent in its largest one-day rise since July 2002.

The FTSEurofirst 300 index of top European shares ended up 0.4 percent at an unofficial close of 1,280.37 points, having risen earlier by as much as 1.2 per cent.

Advancing issues outnumbered decliners by about two to one.

Curbing gains on the market late in the day was a drop in shares of US financial services firm State Street after the company's CFO said it faced "two unrealised losses". This hit Wall Street and kept alive concerns in Europe about the fallout from the credit crunch.

"The whole big picture is the subprime issue and the banks, and 'have we got to the bottom of the write-downs?'" said Andrea Williams, head of European equities at Royal London Asset Management.

Across Europe, British shares outperformed their German and French peers. The FTSE 100 was up 0.7 per cent, while Germany's DAX and France's CAC were down 0.3 per cent.

The British benchmark was boosted by big gains in Anglo-Swedish drugmaker AstraZeneca, which surged eight per cent after it settled US patent litigation against India's Ranbaxy Laboratories over ulcer pill Nexium.

Swiss drugmaker Roche fell 2.8 per cent, however, after big-selling drug Rituxan failed to show it was an effective treatment for a type of multiple sclerosis and ahead of first-quarter sales due tomorrow.

BG Group helped boost the UK index, jumping 5.6 per cent on news that it, Spain's Repsol and Petrobras had made an oil find off Brazil described as possibly the biggest discovery in 30 years.

Repsol, and Sacyr, which owns a stake in Repsol, both rose 9.5 per cent.

German investor sentiment deteriorated for the first time in three months in April, weighed down by concerns about inflation, the ZEW survey showed.