European shares end higher as banks slip on Greece

European shares ended higher yesterday as stronger commodity stocks outpaced a sharp decline in banks, which slipped following uncertainties over the shape of a deal to rescue debt-laden Greece.

The FTSEurofirst 300 index of top European shares rose for a fourth straight session to close 0.3 per cent higher at 990.51 points after a choppy session that saw the index hovering in a broad range of 980.16 to 997.26.

Trading volumes on the FTSEurofirst 300 and Britain's FTSE 100 index were more than 140 per cent of their 90-day daily average, while volume on France's CAC 40 was 198 per cent of its three-month daily average.

Miners got strength from higher metal prices, with copper jumping six per cent, nickel gaining 3.4 per cent and zinc rising 3.2 per cent. BHP Billiton, Anglo American, Antofagasta, Rio Tinto, Xstrata and ENRC rose 0.8 to 2.4 per cent.

But banks were the top decliners, with Banco Santander, Banco de Valencia, Bankinter, Deutsche Bank, Credit Agricole, Alpha Bank and Barclays down 2.2 to 4.1 per cent. Spain's IBEX 35 share index fell 1.7 per cent.

"Greece is still at the forefront of concerns and once again seemed to be the main cause of the market jitters, with still no concrete plans apparent from the EU to help the country out," said Phil Gillett, sales trader at IG Index.

"But it does look like at least some progress is being made, which calmed a few nerves later. The hope is that if some sort of plan is put in place to stabilise the Greek situation, then equity markets will continue to build on the base that has been made, one way or another, over recent days."

European leaders struck a deal to provide financial aid to Greece, in an unprecedented move to stave off a broader crisis in the 16-nation bloc that shares the euro single currency.

Details of the package were not expected to be finalised until early next week, when EU finance ministers meet, but the bloc's leaders suggested it could include some form of loans to Greece to help it service its debt and avoid a damaging default.

"There is still some nervousness. Markets could also perhaps realise more and more that there may be a bailout (for Greece) but it will come at a cost and the cost is that they really have to be tough on the fiscal side," said Klaus Wiener, head of research at Generali Investments.

"When we look at the pillars of growth that we had over the last months, it was really fiscal spending. Now, if countries have to go into reverse, that's not boding well for the growth momentum," he added.

The market also got support from data showing the number of U.S. workers filing new applications for jobless benefits tumbled last week, reversing a recent spike that had raised concerns about renewed labour market weakness. Energy shares tracked stronger crude, which rose 1.2 per cent on an upbeat oil demand growth forecast by the Energy Information Administration. BP, Royal Dutch Shell, BG Group, Tullow Oil, Total and StatoilHydro added 0.9 to 2.5 per cent.