Stocks rose for a second day in Europe yesterday as lower oil prices and another batch of mixed US economic figures cast doubt on the Federal Reserve's need to hike US interest rates aggressively.
French media and telecoms conglomerate Vivendi Universal was among the top gainers, up 2.7 per cent at €20.6 after reporting a narrower first-quarter net loss as the company's fortunes continued to improve after a near-collapse.
Greek power utility Public Power was also a bright spot, its shares rallying 4.8 per cent to €19.9 after the group beat market expectations by posting a 12.3 per cent rise in first-quarter group core profit. Deutsche Bank raised its rating on the stock to "buy".
But Barclays sank two per cent to 486-3/4 pence on doubt the UK bank can sustain the strong growth it outlined in the first quarter, and its house broker Cazenove cut its rating on the stock to "hold" from "buy".
By 1343 GMT, the FTSE Eurotop 300 index was up 0.7 per cent at 989 points, with roughly four issues rising for each one that fell, though volume was moderate.
The narrower DJ Euro Stoxx 50 index gained 1.1 per cent to 2,759.93 points.
The Fed meets late June to review US interest rates amid expectation of a hike.
Although a report yesterday showed the US economy grew at an upwardly revised 4.4 per cent in the first quarter, the growth in corporate profits slowed markedly.
In addition, the core price index for consumer spending, a favourite Fed inflation gauge, gained at an annual rate of 1.7 per cent, which was downwardly revised.
"The numbers are just a shade below estimates and could perhaps mean that the Fed gets just slightly less aggressive. We have seen soft numbers come out for the second straight day," said Richard Reid, European economist at Citigroup.
"The markets certainly expect interest rates to rise, but the question is by how much and how soon. For the moment, markets are very much affected by interest rate worries, oil prices and the geopolitical situation," Reid said.
London Brent crude oil futures fell 1.7 per cent to $36.45 a barrel as the Opec producer cartel's president Purnomo Yusgiantoro said a big increase in output would be needed to dampen prices further.
The oil stock sector was the only industry group in weaker territory as BP Total, and Royal Dutch/Shell all fell.
Stock indexes are sandwiched between last month's 22-month high and a 2004 low of early last week.
"The reality is we are stuck in a trading range until there is more clarity on interest rates," said Nigel Cobby, managing director of European equities at J.P. Morgan investment bank.