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European shares bounce back on GDP data, earnings

Published 05/13/2011, 05:01 AM
Updated 05/13/2011, 05:04 AM
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* FTSEurofirst 300 rises 0.4 pct after falls on Thursday

* Gross domestic product data, company earnings help

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, May 13 (Reuters) - European shares bounced back on Friday, with sentiment improving on some strong corporate results and as figures showed German and French economies grew faster than expected in the first quarter of this year.

At 0847 GMT, the FTSEurofirst 300 <.FTEU3> index of top European shares was up 0.4 percent at 1,149.58 points after rising as high as 1,151.63. The benchmark index fell 0.7 percent in the previous session.

Chemicals shares featured among the top gainers, with Brenntag leading the sector after HSBC raised its target price and reiterated its "overweight (V)" rating on expectations that gross profits will grow further. Brenntag rose 2.2 percent, while the sector index <.SX4P> advanced 1 percent.

"We have got some very good figures out from Germany, and that shows that the country's position is more prudent than some of its rivals," said Keith Bowman, equity analyst at Hargreaves Lansdown.

"The market continues to assess company results, and anything positive is taken on board."

Germany, Europe's largest economy, grew 1.5 percent in the first three months of the year, beating forecasts, while France grew by 1 percent. [ID:nLDE74C0FI]

"It's another data point that is adding to positive sentiment," said Ben Hauzenberger, fund manager at Zurich-based Swisscanto Asset Management, which manages about 60 billion Swiss francs ($68 billion).

"I am rather optimistic for the stock market as a lot of companies have provided very good results. The automobile sector might come back in favour again because of high demand for vehicles."

EARNINGS SUPPORT

Airbus parent EADS rose 3.8 percent as it posted higher-than-expected first-quarter earnings and said its cash pile hit a record 12.2 billion euros ($17.3 billion).

Credit Agricole , France's third-biggest listed bank, rose 1.6 percent after reporting first-quarter results ahead of expectations, while ThyssenKrupp , Germany's biggest steelmaker, gained 2.9 percent on a forecast-beating rise in second-quarter profit. [ID:nLDE74C02Q]

Banks were also in demand, with the sector index <.SX7P> rising 0.4 percent. Allied Irish Banks surged 9.8 percent after sharp declines in the previous two sessions.

Miners, which saw a sharp sell-off in the previous session, bounced back with a recovery in metals prices. The STOXX Europe 600 Basic Materials index <.SXPP> was up 0.7 percent.

But some analysts said investors should stay cautious in the near term as the euro zone debt crisis rumbled on. The International Monetary Fund said on Thursday that the debt crisis could yet spread to core nations in the single currency bloc.

Investors kept a close eye on commodity trader Glencore's [GLEN.UL] $11 billion London listing. A source close to the deal said on Friday that order books are covered "multiple times" over across the range. [ID:nWLA0257] (Editing by Will Waterman)

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