European shares gain for sixth day in seven

European shares rose for the sixth session in seven yesterday, with Barclays leading banks higher after it kicked off the UK sector's reporting season with forecast-beating results.

Commodity shares gained on higher crude and metals prices, which were helped by US manufacturing data. The pan-European FTSEurofirst 300 index of top shares rose one per cent to 1,002.10 points, its highest close since February 3.

The index is down 4.2 per cent this year, partly due to worries about Greece's deficit, but is up more than 55 per cent from the lifetime low it hit on March 9, 2009.

"The cyclical tailwind is still intact, with good support from economic data, as well as from companies' earnings," said Tammo Greetfeld, equity strategist at UniCredit Group.

"But there is downside risk from how the Greek deficit problems evolve." Banks added the most points to the index. Barclays jumped 6.8 per cent after the bank said it had started the year well having beat expectations, with 2009 profits of over £11.6 billion (€13.272 billion).

Royal Bank of Scotland rose 5.3 per cent after JPMorgan said it was buying the non-US assets of commodities joint venture RBS Sempra from RBS and Sempra Energy for about $1.7 billion cash.

BNP Paribas rose 2.8 per cent ahead of results today. Credit Suisse, Deutsche Bank, HSBC, Lloyds and Société Générale rose between 1.6 and 4.7 per cent.

Across Europe, the FTSE 100 index ended the day 1.5 per cent higher; Germany's DAX rose 1.5 per cent and France's CAC 40 1.7 per cent respectively. Wall Street, which was closed on Monday for a holiday, was higher around the time European bourses were closing. The Dow Jones, S&P 500 and Nasdaq Composite were up between 0.8 and one per cent.

A gauge of manufacturing in New York state rose in February as inventories jumped, the New York Federal Reserve said in a report yesterday. The New York Fed's "Empire State" general business conditions index rose to 24.91 in February from 15.92 in January.

Miners were in favour as copper rose more than three per cent, and other metals gained. Anglo American, Antofagasta, BHP Billiton, Xstrata and Vedanta were 3.1 to 5.2 per cent higher.

On the downside, French company L'Oreal fell 4.7 per cent, having announced fourth-quarter sales below forecasts late on Monday. Flavours and fragrances maker Givaudan slipped 3.7 per cent after it posted a full-year net profit of 199 million Swiss francs (€135.56 million), while analysts in a Reuters poll had expected 205 million francs.

European ministers told Greece yesterday it may need to take further steps to bring a swollen debt under control and calm "irrational" financial markets, as wage cuts already announced by Athens sparked another strike.