Stock gains lift European shares

Gains in financial stocks lifted European shares yesterday as markets cheered Bank of America's stronger-than-expected quarterly results, while declines in Roche offset some of the gains.

The Swiss drugmaker fell some five per cent and was the heaviest negative weight on the pan-European FTSEurofirst 300 index after it offered to acquire all outstanding shares in its US partner Genentech Inc. for $43.7 billion.

Genentech's shares rose 12.4 per cent in the US.

The pan-European FTSEurofirst 300 index closed 0.5 per cent higher at 1,170.16 points, ending higher for the fourth session in a row.

The index gained around 3.2 per cent last week, rallying after quarterly results from Citigroup and Wells Fargo calmed fears over banks' balance sheets. Bank of America, the second-largest US bank, became the latest major bank to exceed Wall Street estimates, suggesting the financial sector may be stabilising.

Its shares rose some eight per cent.

"These are some good results from Bank of America and it calms the market," said Joerg Rahn, economist at MM Warburg.

"It's a relief that not everyone is doing badly, that not all banks are hit badly by the crisis," he added.

Around Europe, Germany's DAX index added 0.7 per cent and France's CAC 40 rose 0.7 per cent, and the UK's FTSE 100 index rose 0.5 per cent.

British lender HBOS was among the strongest decliners in the FTSE 100, falling 6.2 per cent as investors took just 8.3 per cent of the shares in HBOS's £4 billion rights issue.