European shares edge up on oil stocks, banks

LONDON - European shares edged up at midday on Thursday, buoyed by energy shares as Royal Dutch Shell's results cheered the sector and HBOS helped lift banks after posting figures free of nasty surprises.

By (Reuters)

Published: Thu 31 Jul 2008, 6:17 PM

Last updated: Sun 5 Apr 2015, 1:03 PM

UK lender HBOS rose 7.5 percent after its results beat expectations.

Deutsche Bank gained 0.3 percent. Its shares fell earlier after the bank said it made a further $3.6 billion of writedowns in the second quarter, taking its bill from the global financial crisis beyond $11 billion.

Among energy shares, BP rose 2.5 percent and Total put on 1.8 percent. Shell, which gave back earlier gains to trade little changed, reported a 5 percent rise in second-quarter current cost of supply (CCS) net income to $7.9 billion, and said it beat analysts' forecasts, on high oil prices.

At 1052 GMT the pan-European FTSEurofirst 300 index was up 0.3 percent at 1,184.37 points.

But a slew of downbeat results from other companies and rising inflation data kept gains on a leash.

French drugmaker Sanofi-Aventis was the biggest individual drag on the index, down 4.7 percent after its quarterly sales and profit disappointed investors and after giving a modest upgrade to its full-year EPS forecast, now seen up 8 percent.

Britain's BT Group tumbled 14.4 percent after it just missed estimates for first-quarter core earnings and worried investors with key indicators such as its free cash outflow and margins.

"(The results) are a little bit more disappointing than I would have expected ... It'll trigger further forecast downgrades," Jeremy Batstone-Carr, head of private client research at Charles Stanley, said of Thursday's raft of results.

"(But this) will ultimately clear the decks for a revival in sentiment ... A dose of reality is probably what analysts need."

He added that there were "opportunities for the brave" in the market. "You could be rewarded for dipping a toe in the market now," he said.

Inflation worries

European equities had earlier headed lower after data showed euro-zone inflation jumped to another record high of 4.1 percent year-on-year in July as forecast, while a bleak economic outlook may discourage a further interest rate increase this year.

Among other disappointing results, Solvay sank 8.1 percent after the chemicals and drugs maker reported a worse- than-expected fall in second-quarter profit, hit by energy and raw material costs.

Unilever shares fell 8.9 percent after the company's results figures failed to impress the market.

Spanish utility Union Fenosa jumped 8.4 percent after rival Gas Natural agreed to buy a stake in the company from ACS and then launched a full takeover bid. Gas Natural fell 4.6 percent and ACS rose 4.9 percent.

France Telecom rose 1.9 percent after saying it would pay an interim dividend for the first time as it posted first-half underlying profit which slightly beat expectations.

Technip gained 5.6 percent after posting a 29 percent rise in second-quarter net profit, driven by subsea projects for the oil and gas industry.

Major indexes across Europe shook off earlier losses, with Germany's DAX index up 0.5 percent, UK's FTSE 100 index rising 0.3 percent and France's CAC 40 gaining 0.2 percent.

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