European shares close higher led by banks, miners

European shares advanced yesterday, led by financials such as Swiss bank UBS amid hopes that asset writedowns will soon have been left behind, and miners such as Xstrata thanks to higher metals prices.

The FTSEurofirst 300 index of top European shares ended unofficially 0.7 per cent higher at 1,339.45 points - its highest close since February 27 - having risen for the fourth session in a row.

With UBS up 3.2 per cent and rival Swiss bank Credit Suisse 2.7 per cent higher, the DJ Stoxx bank index was the day's top sectoral performer with a gain of 1.1 per cent followed by insurance, up 1.06 per cent.

Among mining stocks, Xstrata rose 2.4 per cent and Antofagasta gained 2.6 per cent lifted by higher copper prices. The DJ Stoxx basic resources index, which includes miners rose by just over one per cent. European shares rose for the fourth straight day by midday yesterday, helped by banks and commodity stocks that gained on company results and stronger oil and metal prices.

Heavyweight BP contributed the most points to the index, rising one per cent as crude prices flirted with $120 a barrel. Total gained 0.5 per cent and Shell 0.4 per cent. Both BP and Shell report quarterly results today.

At 1043 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 per cent at 1,341.86 points, putting it on track for its best month since October 2003, and interrupting a slide from multi-year peaks hit last July.

"We think this is still a bear market rally and remain convinced that US earnings will take a hit later this year," said AXA Investment Managers strategist Franz Wenzel.