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European shares boosted by strong earnings results

Published 10/14/2011, 04:59 AM
Updated 10/14/2011, 05:08 AM
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* FTSEurofirst 300 index rises 0.7 percent

* Google boosts tech stocks

* Banks hit after ratings worries

By Joanne Frearson

LONDON, Oct 14 (Reuters) - European shares rose on Friday, boosted by better-than-expected results from Google and forecast beating earnings news from Syngenta offsetting weakness in banks after fresh ratings agency actions weighed on the sector.

Technology stocks were given a boost after impressive results from Google with the STOXX Europe 600 Technology index rising 1 percent.

The world's largest agrochemicals company, Syngenta, rose 4.2 percent to become one of the biggest gainers in Europe after third-quarter sales jumped 21 percent due to strong demand in Latin America.

"The numbers we had overnight have been okay in the United States and Syngenta have been quite good," Andrea Williams, who manages $2.1 billion in assets for Royal London Asset Management, said. "We have been adding Syngenta."

"Away from the banks the market wants to rally... we still have not solved Greece... and the danger is Spain still needs to inject money into its banking system," Williams said.

Banks were the worst performers after Fitch Ratings cut UBS long-term issuer default rating and placed seven other U.S. and European banks on credit watch negative due to challenges in the economy and financial markets.

The European banks Fitch put on review included BNP Paribas , Credit Suisse Group AG , Deutsche Bank AG , Societe Generale and Barclays Bank .

Societe Generale was hit the most, down 4.2 percent to become the worst performers in Europe after being put on review, while Deutsche Bank followed closely behind down 3.3 percent.

UBS was another standout loser, down 2.8 percent after the Swiss bank's long-term issuer default rating was lowered to A from A+.

By 0832 GMT, the pan-European FTSEurofirst 300 index of top shares was up 0.7 percent at 973.05 points in a choppy session having fallen to as low 964.01 earlier.

The index, however, is still down 13.3 percent for the year on worries about a slowdown in global growth and concerns about contagion in the euro zone debt crisis.

The next resistance level for the FTSEurofirst 300 was seen at its 50 percent Fibonacci retracement or 983.88 points from its sell-off which started in July to it September low, while support was at its 38.2 percent Fibonacci retracement at 952.61.

EURO ZONE WORRIES

Adding to the worries for banks about challenges faced by the region was a Standard and Poor downgrade of Spain's long-term credit rating due to rising unemployment, tightening credit and high private sector debt.

There was also nervousness ahead of a G20 meeting in Paris to address the euro zone debt crisis. With disagreement between policymakers on how to recapitalise banks and stabilise Greece, a breakthrough was seen as unlikely.

French and German officials are expected to put together an action plan to help ease the region's problems before a European Union summit on Oct. 23, but it is likely difference between countries are likely to emerge.

Germany is leaning towards a second round of losses for Greek bondholders, while Paris is reticent and traders were not convinced the market would stay higher as a result of these differences.

"I am a bit worried about the market at these levels. It feels a little bit high," Joe Rundle, head of trading at ETX Capital, said.

"They have still not resolved the euro zone debt problem and the U.S. economy is still floundering. Nothing has been solved." ============================================================ For rolling updates on what is moving European shares please click on ============================================================ For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. STOXX Europe index.................................. Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................

Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. CAC-40............... World Indices.....................................<0#.INDEX> Reuters survey of world bourse outlook......... Western European IPO diary......................... European Asset Allocation........................ Reuters News at a Glance: Equities................. Main currency report:................................. (Editing by Mike Nesbit)

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