European shares ended higher yesterday in a choppy session, extending a winning streak to five days, with commodity stocks the major gainers as the price of crude oil and metals rose.
The pan-European FTSEurofirst 300 index of top shares was up 0.4 per cent at 875.85 points at the provisional close, having traded in a narrow range.
The index, which slumped 45 per cent in 2008, rose to its highest close in more than four months on Tuesday and is about 35 per cent higher than a lifetime low on March 9.
"Cyclicals are leading the market today, commodity prices are quite firm. There is no particular strong news out there and investors are asking what are the themes - which is the oil price ticking up today," said Nomura strategist Philip Lawlor.
"Investors still want to build positions in cyclicals as they have been extremely oversold."
Energy stocks were higher, with oil firming above $61 a barrel to touch a new six-month high as bullish inventory data and a spate of refinery accidents in the United States smoothed over investor resistance.
BG Group, BP, Royal Dutch Shell and Total were up between 0.7 and 1.5 per cent.
Miners rose as metal prices advanced, with copper gaining 1.7 per cent.
Lonmin soared 8.1 per cent, while Anglo American, Antofagasta , BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata were between 0.9 and 4.3 per cent higher.
Banking stocks took the most points off the index in a choppy session, although stocks within the sector were mixed.
The sector took some support from news that Bank of America Corp raised $13.47 billion through a share sale, marking a major step toward meeting the US government's requirements for capital-raising following the recent "stress testing" of the bank. Société Générale, Deutsche Bank and Bank of Ireland were up between 1.5 and 15.1 per cent.
However British banks were in the doldrums, with HSBC, Standard Chartered and Lloyds Banking Group down between 1.9 and 8 per cent.
Insurers were also down. Allianz fell 3.2 per cent as Nomura downgraded the company to "reduce" from "neutral".
Heavyweight mobile telephone group Vodafone slipped 1.9 per cent after Fitch ratings changed the outlook on the long-term issuer default rating to "negative" from "stable".
"Markets have been still quite resilient ... but still quite a lot of nervousness about the impending recovery which will probably restrain the market going forward," said Darren Winder, a strategist at Cazenove.
"When we are reaching levels where investors feel like things are getting fully valued we do so see a little more volatility."
Among the gainers, Bayer was 6.4 per cent higher after its Nexavar drug won Japanese regulatory approval for treating advanced liver cancer, giving a boost to one of its top drug hopes. Porsche ticked up three per cent after the families who control the company said they were open to the idea of selling a stake to an outside investor. Across Europe, the FTSE 100 index was down 0.3 per cent, Germany's DAX was up 1.6 per cent and France's CAC 40 was up 0.9 per cent.