Commods lift Europe stocks; rights woes hit banks
LONDON, May 15 (Reuters) - European shares ended higher on Thursday as commodity and drug stocks gained and economic growth data proved surprisingly strong, offsetting the impact of concerns over more rights issues in the banking sector.
The pan-European FTSEurofirst 300 .FTEU3 index ended 0.38 percent higher at 1,359.86 points, its third day of modest gains out of the four sessions in the week so far, with the undertone bullish due to strong economic growth data from the region.
The index has now gained 1.7 percent this month, building on a 6 percent gain in April, giving investors respite from a sharp slide that started almost a year ago and stemmed from credit market problems.
Roche Holding (ROG.VX) rose 2.5 percent and Novartis (NOVN.VX) gained 1.7 percent on hopes for key cancer drug trials due to be presented at a research meeting at the end of the month. Much of the information will be available from Friday.
BT Group (BT.L) jumped 5.4 percent after posting strong fourth-quarter results, while Deutsche Postbank (DPBGn.DE) rose 3 percent to top German gainers on talk of takeover interest from insurer Allianz (ALVG.DE). Allianz and Postbank's owner Deutsche Post (DPWGn.DE) both declined to comment.
Sharp German economic growth and a surge in France produced a healthy showing from Europe when growth estimates for the first three months of the year were published on Thursday.
"It looks as if the European Central Bank will stay on hold. Interest rates and bond yields may now be low enough for risk appetite to ... put equities under upward pressure," said Bernard McAlinden, strategist at NCB Stockbrokers in Dublin.
"The line of least resistance is upward and I wouldn't be unhappy if, by the end of the year, we had dividend yield plus a small capital gain from equities," he said.
Vivendi (VIV.PA), Europe's largest entertainment group, jumped 5.2 percent after posting a smaller-than-expected drop in first-quarter operating profit late on Wednesday.
Miners and oil stocks tracked copper and crude prices higher.
Anglo American (AAL.L), Rio Tinto (RIO.L) and BHP Billiton (BLT.L) all gained more than 2 percent while BP (BP.L) tacked on 0.6 percent.
Across Europe, Britain's FTSE 100 .FTSE gained 0.6 percent, while Germany's DAX .GDAXI and France's CAC .FCHI ended flat.
RIGHTS FEARS HIT BARCLAYS, C. AGRICOLE
Banks, the sector battered worst by a credit market crisis that forced them to take big writedowns and raise capital, were mixed. Continued...
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