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Robust U.S. data feeds European stocks rally

Published 09/15/2009, 12:28 PM
Updated 09/15/2009, 12:33 PM
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* FTSEurofirst 300 up 0.1 pct; rises for 7th time in 8 days

* Bernanke, strong U.S. retail sales lift sentiment

* France's EDF surges on report over tariffs

* For up-to-the-minute market news, click on

By Blaise Robinson

PARIS, Sept 15 (Reuters) - European stocks ended higher on Tuesday, led by banks such as HSBC, as robust U.S. monthly retail sales rekindled hopes of a speedy economic recovery and helped the market resume its two-week rally.

The FTSEurofirst 300 index of top European shares closed 0.1 percent higher at 992.37 points, gaining ground for the seventh time in eight sessions.

Banking stocks paced the gains, with HSBC up 1.4 percent, Societe Generale up 1.1 percent and Banco Santander up 1.2 percent.

"Good macro figures are piling up," said Jacques Henry, analyst at Louis Capital Markets, in Paris.

"There has been no negative signal on the macro front in a while, and the economic recovery is happening quickly. Long-only investors are coming back en masse," he said.

U.S. retail sales rose at the fastest pace in 3-1/2 years last month, and a gauge of New York State manufacturing hit a near two-year high, data showed on Tuesday.

Resource-related stocks also gained ground, climbing along with metal and crude oil prices. ArcelorMittal gained 2.6 percent, Rio Tinto rose 1.7 percent and Repsol added 1.3 percent.

Around Europe, UK's FTSE 100 index rose 0.5 percent, Germany's DAX index added 0.2 percent, and France's CAC 40 gained 0.6 percent.

"I'm confident for the remaining part of the year, because near-zero interest rates have prompted investors to come back to risky assets," said Romain Boscher, head of multi-asset management at Groupama Asset Management, in Paris.

French utility EDF surged 6.7 percent after daily Les Echos reported the French government could end regulated electricity prices for companies by 2015, in a deal with the European Commission to be announced this week.

BERNANKE BOOSTS MOOD

"Ultimately, having part of the customers still regulated --residential mainly and small industrials-- but at a higher price level than now, and the industrials not regulated anymore is a huge positive for EDF," Banc of America-Merrill Lynch analysts wrote in a note.

Stocks also got a boost from the U.S. Federal Reserve Chairman Ben Bernanke, who said the U.S. economic recession was probably over but the recovery would be slow and take time to create new jobs.

"From a technical perspective, the recession is very likely over," Bernanke said at a Brookings Institution conference, but he cautioned it may not feel like it's over.

On the downside, pharma stocks fell, with GlaxoSmithKline down 1.2 percent, Sanofi-Aventis down 0.4 percent and AstraZeneca down 0.2 percent.

Shares of food producers and retailers also lost ground, with Nestle losing 0.6 percent, Ahold falling 2 percent and Carrefour dropping 2.4 percent.

The FTSEurofirst 300, which has gained 54 percent since reaching a floor in early March, is up 19 percent so far in 2009, but is still down 15 percent from its level in mid-September 2008 before the collapse of Lehman Brothers, once the fourth-largest U.S. investment bank.

(Additional reporting by Juliette Rouillon; editing by Elaine Hardcastle)

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