European shares end higher
European shares ended higher yesterday, snapping a three-day losing streak after data showed a rise in US consumer confidence, though banks limited gains due to worries over more write-downs linked to a credit crisis. The FTSEurofirst 300 index of top...
European shares ended higher yesterday, snapping a three-day losing streak after data showed a rise in US consumer confidence, though banks limited gains due to worries over more write-downs linked to a credit crisis.
The FTSEurofirst 300 index of top European shares provisionally closed 0.3 per cent higher at 1,162.57 points, also helped by a cooling off in oil prices.
Earlier, a higher-than-expected reading on the US consumer sentiment index helped bring about a turnaround for European shares, which fell as much as 1.3 per cent earlier in the day.
The consumer index came in at 51.9 for July - the first rise since December - from an upwards revised 51.0 in June, which was the lowest since a reading of 47.3 in February 1992.
Banks remained a prominent negative weight on the FTSEurofirst 300, with investors spooked by a shock writedown from Merrill Lynch overnight.
The DJStoxx European banks index was down 0.6 per cent, with UBS losing 3.6 per cent, Barclays dropping 4.1 per cent and BNP Paribas down 1.8 per cent. The banking index lost as much as 3.6 per cent earlier in the session.
A sharp decline in the price of oil to the lowest level since May 6 amid signs of weakening demand helped lift the mood in other sectors, with airlines gaining ground, also lifted by news that British Airways and Spain's Iberia were in talks about an all-share merger.
British Airways rallied six per cent.
Heavyweight oil stocks, however, fell: BP, Shell and Total lost between 0.9-2.5 per cent.
The stream of profit warnings also continued to haunt investors, with Akzo Nobel cutting its target for 2008 profit, pointing to currency effects, rising material prices and a slowing economy. The stock slumped 10.9 per cent.
German flavours and fragrances maker Symrise lost 6.5 per cent after it lowered its forecasts for profit growth.
SAP rallied 9.8 per cent after releasing a solid set of second-quarter earnings results and providing an upbeat 2008 outlook.
Dutch chemicals group DSM also impressed with its quarterly earnings results. The company also raised its guidance for the full-year and shares soared eight per cent.