European equities end higher on strong food shares

LONDON Thu Dec 16, 2010 11:33am EST

LONDON Dec 16 (Reuters) - European equities ended higher on Thursday, helped by gains in food and beverages shares following a jump in Danisco DCO.CO stocks on strong results, though worries about the euro zone debt situation weighed on sentiment.

Appetite for risky assets remained high and the FTSEurofirst 300 .FTEU3 index of top European shares hovered near this week's 26-month highs. The index provisionally closed 0.3 percent higher at 1,130.79 points.

Investors kept an eye on the two-day EU summit which comes as Portugal and Spain face growing bond market pressure after heavily indebted Greece and Ireland received EU/IMF bailouts in return for implementing harsh austerity measures.[ID:nLDE6BE29I]

"The risk of contagion continues to play on investors' minds and that is certainly one of the biggest macro risks that you can point to as you look towards 2011," said Henk Potts, equity strategist at Barclays Wealth.

"But the corporate picture still looks very bright, the trend towards higher profits continues and public policy should remain shareholder-friendly. The name of the game is to try and hold onto the gains seen over the past couple of weeks."

Food ingredients and enzymes maker Danisco rose 4.4 percent after it posted a bigger rise than expected in second-quarter profits, driven by efficiency measures and sales growth, and nudged up full-year guidance. [ID:nLDE6BD1OO] (Reporting by Atul Prakash)

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