European shares rise

LONDON (Reuters) - European shares were higher at midday on Thursday, with financial stocks gaining strength after sharp falls in the previous sessions.

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange December 7, 2009. REUTERS/Remote/Ahmad Masood

By 1231 GMT (7:31 a.m. EST), the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 1 percent at 1,004.58 points. The index is up 56 percent since reaching a record low in early March and is up about 21 percent for the year. "Very thin volumes, but I do think there has been a sense of a little bit overdoing it on the downside after Dubai and the Greek and Spanish situations ... there is now a comeback," said Stephen Pope, chief global market strategist at Cantor Fitzgerald.

The Bank of England left its asset purchase programme intact at 200 billion pounds ($325 billion) and held interest rates at 0.5 percent, as widely expected.

UK policymakers have indicated they are likely to stay on hold until at least February when they will get their new growth and inflation forecasts and the scheduled asset purchases run out.

Banks added the most points to the index. HSBC HSBA.L, UBS UBSN.VX, Lloyds Banking Group LLOY.L and Credit Suisse CSGN.VX were up 1.7 to 5.1 percent.

The banking sector fell in the previous three sessions after Standard & Poor cut Spain’s outlook to negative on Wednesday and Fitch trimmed Greece’s debt to the lowest level in the euro zone on Tuesday.


Food producers were in demand. Nestle NESN.VX, Unilever ULVR.L and Danone DANO.PA gained 1.2 to 1.8 percent.

Miners were under pressure as copper is on course for its biggest weekly drop since September.

Anglo American AAL.L, Antofagasta ANTO.L, BHP Billiton BLT.L, Rio Tinto RIO.L and Xstrata XTA.L were down 0.5 to 1.8 percent.

The FTSEurofirst 300 index has traded in a broad range of 959.65-1,036.39 points in the past three months and has closed in positive and negative territory almost an equal number of times.

“The market will remain volatile until the end of the year,” said Luc Van Hecka, chief economist at KBC Securities.

“Most of the major long-term investors have already closed their books for the rest of the year. The market is really in the hands of traders.”

Across Europe, the FTSE 100 .FTSE index was up 0.7 percent, Germany's DAX .GDAXI was 1 percent higher and France's CAC 40 .FCHI was up 0.9 percent.

Additional reporting by Atul Prakash; Editing by Rupert Winchester