Oil stocks, Sanofi push Europe shares to 4-mo high

By Eva Kuehnen

FRANKFURT, May 16 (Reuters) - European shares rose to a four-month high on Friday, lifted by pharmaceutical stocks after positive data for a Sanofi-Aventis (SASY.PA: Quote, Profile, Research, Stock Buzz) heart drug, while energy shares powered higher with oil around $125 a barrel. By 0942 GMT, the pan-European FTSEurofirst 300 index was up 1 percent at 1,373.59 points, its highest since Jan. 18 and rising for a third consecutive session. The index has gained about 1.3 percent so far this week.

"Optimism seems to have returned to the market now. While the market played doom and gloom in mid March we are more positive for the coming weeks and months," said M.M. Warburg chief economist Carsten Klude.

Sanofi was among the heavyweights lifting the index. Its shares rose 3.6 percent as investors welcomed positive clinical trial results for heart drug Multaq, which some analysts believe could sell more than $2 billion a year.

The DJ Stoxx European drugs sector rose 0.7 percent with AstraZeneca (AZN.L: Quote, Profile, Research, Stock Buzz) up 2.2 percent, Roche (ROG.VX: Quote, Profile, Research, Stock Buzz) up 0.3 percent and Novartis (NOVN.VX: Quote, Profile, Research, Stock Buzz) up 0.7 percent.

Oil majors such as Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), BP (BP.L: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell (RDSa.AS: Quote, Profile, Research, Stock Buzz) gained more than 1 percent each as the oil price rose. U.S. crude CLc1 rose 95 cents to $125.07 a barrel.

Against the background of higher oil prices, investors scrutinised an earnings update from British Airways (BAY.L: Quote, Profile, Research, Stock Buzz).

The airline's stock rose 7 percent after it unveiled its first dividend payment since 2001 and met forecasts with a 45 percent rise in annual profit.

Germany's Lufthansa (LHAG.DE: Quote, Profile, Research, Stock Buzz) was up 3.2 percent, leading gainers in the country's blue-chip DAX index .GDAXI, which was up 1.1 percent.