European shares hit a more than 17-month high yesterday, boosted by Cairn Energy after it gave an upbeat outlook and by insurer Legal & General, which reported better than expected results.
The FTSEurofirst 300 index of leading European shares closed up 0.7 per cent at 1,072.44 points, its highest closing level since early October 2008.
The index, which gained around 26 per cent in 2009, is up 2.6 per cent this year."The markets do not really want to give up and are getting some encouragement. The earnings results are still coming through," said Mike Lenhoff, strategist at Brewin Dolphin.
Oil explorer Cairn Energy advanced eight per cent after the company accompanied its full-year results with upbeat comment on its operations in India and Greenland. Financials were also in favour, with Legal & General rising 4.7 per cent after it beat forecasts with an 87 per cent profit rise and underlined its confidence with a 33 per cent dividend increase, partly reversing the 50 per cent cut made a year ago.
Also on the upside, OPAP jumped nearly nine per cent after Europe's biggest betting firm posted better than expected fourth-quarter results.
Across Europe, the FTSE 100 index and Germany's DAX were both up 0.5 per cent, while France's CAC 40 was up 0.6 per cent.
On the downside, Volkswagen fell more than six per cent after it said it will issue 65 million new preferred shares, or roughly half of its authorised capital, raising roughly €4 billion. BAE Systems slipped 2.2 per cent, impacted by a recent contract disappointment as well as a rating downgrade by Bernstein Research to "market perform" from "outperform" on valuation grounds.
Unibail Rodamco shed 1.7 per cent. Société Générale downgraded its recommendation on the firm to "sell" from "hold" as the broker cut ratings on several other European real estate companies. In economic news, sales of previously owned US homes fell less than expected in February, according to a trade group report.
The National Association of Realtors said sales fell 0.6 per cent month-over-month to an annual rate of 5.02 million units. Last January's sales were unrevised at 5.05 million units. It was the third straight month of declines in sales.