European stocks end higher for eighth day

European shares closed higher for the eighth straight session yesterday, their longest winning streak since December 2006, as gains in pharmaceutical stocks overshadowed falls in banking stocks.

The pan-European FTSEurofirst 300 index of top shares ended 0.2 per cent higher at 890.05 points, the highest close since early January, after trading in a wide range of 879.97-890.38 points.

The index is up around 37 per cent from its lifetime low of March 9.

"Markets have been a little undecided today showing that the rally may not be guaranteed to continue. Further highlighting the changing mood were the stocks in focus as investors went to the defensive stocks for protection," said Jimmy Yates, head of equities at CMC Markets.

Across Europe, the FTSE 100 index was up 0.3 per cent, Germany's DAX was up 0.5 per cent and France's CAC 40 was up 0.1 per cent.

Drugmakers added the most points to the index, supported by positive earnings news as US peer Pfizer raised its full-year forecast for earnings, excluding items, and revenue.

Novartis, AstraZeneca and Novo Nordisk were up between 0.5 and 1.2 per cent.

However, GlaxoSmithKline fell 0.6 per cent after earlier gains. The company said that it had beat expectations with its second-quarter earnings and said momentum in the second half would pick up on the back of flu vaccine sales. Bayer was up 2.2 per cent after the company and its development partner Onyx Pharmaceuticals said their cancer pill Nexavar showed promise in treating breast tumours in a Phase II study. Onyx Pharmaceuticals soared 24 per cent.

Banking shares took the most points off the index after Morgan Stanley reported its third consecutive quarterly loss, while Wells Fargo reported rising credit losses.

"Morgan Stanley's operating loss per share looks on the high side, compared to others in the sector. I think Morgan Stanley's paying back public aid has distorted results, it is not known if this has been incorporated into analysts' expectations of the results," said Heino Ruland, strategist at Ruland Research.

Barclays and Lloyds Banking Group were down 3.1 per cent and 1.6 per cent respectively, as National Australia Bank which owns the Clydesdale and Yorkshire Banks reported a jump in UK bad debts.

Credit Suisse, UBS and Nordea Bank were 1.1 to 1.8 per cent lower.

Insurers were also lower. Axa, Zurich Financial and Swiss Re slipped 1.2 to 1.6 per cent.

Miners were in the doldrums. BHP Billiton fell 1.8 per cent after the world's largest miner reported a 10 per cent fall in iron ore output to 27.048 million tonnes after its operations were hit by mining fatalities and flooding in Australia.

Anglo American, Antofagasta and Eurasian Natural Resources Corporation were down between 0.9 and 1.3 per cent.

Today, investors await of slew or earnings news. In Europe, numbers are expected from Credit Suisse, Roche and Imperial Tobacco.

In the US investors were awaiting earnings news from Microsoft, Ford Motor, American Express, Amazon.com and Bristol-Myers Squibb.