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European stocks steady after 2-day rally; oil up

Shares in Societe Generale dropped 1 percent as the French bank launched a 2.4 billion euro rights issue to help finance acquisitions.

Bid activity swirled through the market, with Portugal Telecom up 1.5 percent after the country’s competition authority approved a bid by Sonaecom, whose shares jumped 6 percent.

By 1100 GMT, the pan-European FTSEurofirst index of 300 leading shares was up 0.05 percent at 1,397.8 points, just shy of near-five-year highs struck in May. The index has gained 2 percent in the past two days and is up nearly 10 percent so far this year.

US stock index futures pointed to a steady start for Wall Street ahead of a revision of second-quarter US gross domestic product data due at 1230 GMT, with the Dow Jones industrial average near a record close.

The Dow rose 0.2 percent to end at 11,689.2, after climbing to a session high at 11,720.8 -- just a notch below the Dow’s record close of 11,722.9, which was hit on Jan. 14, 2000.

“Equity markets appear to be discounting a soft landing as well as lower US interest rates to boot,” Brewin Dolphin Securities’ chief strategist Mike Lenhoff said in a note.

“On that view earnings are still likely to hold up reasonably well. Even allowing for some downward revision in analysts’ earnings estimates for next year, valuations still look appealing.”

Spanish action

Spain’s benchmark IBEX index eased after closing at a record high in the previous session.

“While there is still all this frenetic activity in the electricity sector we are going to stay around these levels,” said Jesus Fernandez, head of trading at Banco Finantia Sofinloc.

Endesa, which surged to 35 euros on Wednesday to match a new takeover bid from E.ON, dropped 1 percent to 34.6 euros. Iberdrola fell 5 percent, paring Wednesday’s 14 percent surge.

Among gainers, Spanish property company Fadesa leapt 19 percent after rival Martinsa bid to buy the company.

Around Europe, London’s FTSE 100 index rose 0.5 percent, boosted by miners and oil firms.

Paris’s CAC-40 advanced 0.2 percent and Frankfurt’s DAX ticked up 0.09 percent.

Britain’s Hanson jumped 4 percent, with some traders speculating France’s St Gobain could be among companies looking to make an offer. Hanson was holding an investor and analyst visit on Thursday.