European shares rise after upbeat US economic data

European shares rose yesterday afternoon, tracking Wall Street, after upbeat US economic data.

At 1502 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 per cent at 745.49 points, and had hit a new day's high of 749.02 points. It sank as low as 732.7 earlier in the session. "It's about time we had some good news," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities in London.

"Does this mean it's all coming together? Far from it, but it provides a respite from what has been a monotonous stream of poor newsflow."

New orders for long-lasting US made goods rose in February for the first time in seven months and new home sales rebounded, government reports showed, suggesting the economic downturn might be easing a bit.

The Commerce Department said durable goods orders rose 3.4 per cent to $165.6 billion in February, the biggest gain since December 2007, after a 7.3 per cent plunge the prior month.

In another report, the department said sales of newly built US single-family homes rose at their fastest pace in 10 months in February.

The Dow Jones, S&P 500 and Nasdaq Composite were up between 2.1 and 2.3 per cent.

Oil companies were heavyweight gainers. Despite a report showing that US crude inventories rose last week, the oil price remained near $53 a barrel. Total, ENI, BP , Royal Dutch Shell, Repsol and Statoil were up between 2.2 and three per cent.

Italy's Eni rose 4.6 per cent after industry sources said Russia's Gazprom would borrow from state banks to finance a $4 billion-plus buyback from Eni of a 20 per cent stake in its oil arm, Gazprom Neft, in early April.

Across Europe, Britain's FTSE 100 was down 0.1 per cent; Germany's DAX and France's CAC-40 were up 1.2 and 1 per cent respectively.

Europe's biggest retailer Inditex was up 4.4 per cent after it said it expected to outperform the industry in 2009 and would continue to focus on profitable expansion.