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Retailers push Europe shares higher; Carrefour up

Published 09/17/2010, 07:13 AM
Updated 09/17/2010, 07:16 AM
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* FTSEurofirst 300 index rises 0.9 percent

* Carrefour jumps on hypermarket revamp hopes

* Invensys up on Chinese rail deal

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

LONDON, Sept 17 (Reuters) - European shares rose on Friday and are on track to record their third consecutive week of gains, boosted by retailers, led by Carrefour after it unveiled a revamp plan for its hypermarkets.

By 1100 GMT, the pan-European FTSEurofirst 300 index of top shares was 0.9 percent higher at 1,085.19 points and is 0.4 percent higher for the week. The index is on track to record a third consecutive week of gains.

It has risen 5.7 percent in September, but it is up only 3.7 percent in 2010, on worries about European debt levels and the strength of the economic recovery.

"It's a pretty solid day," Peter Dixon, UK economist at Commerzbank said. "I think we have had our Autumn wobble and hopefully as the economic situation firms up we will see a bit more upside."

"We remain fairly optimistic on equity markets and expect a modest upward trend."

Retailers were the best performing sector, with the STOXX Europe 600 Retail index up 2.2 percent.

Carrefour shares jumped 5.6 percent after the world's No.2 retailer unveiled a revamp plan for its European hypermarkets which it said could more than double profit by 2015.

Technology stocks were in demand. European chipmakers STMicroelectronics and Infineon gained 4.1 percent and 3.6 percent respectively, on sector optimism after U.S. rival Texas Instruments announced a dividend hike and share buyback.

"It's clearly a sign that things are going well in the sector and that we might get positive surprises from chip makers in the next quarters," a Paris-based trader said.

INVENSYS RISES

Invensys gained 6.5 percent after the engineer signed an agreement with Chinese rolling stock maker CSR Corporation to enable CSR's signalling company to license and manufacture its interlocking technology for the mass transit market.

Miners also featured among the top movers as copper gained 1.5 percent and gold hit a record high following reassuring comments from China's central bank about its plans to keep monetary policy loose.

Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata gained 0.7 to 2 percent.

The Euro STOXX 50, the euro zone's blue-chip index, rose 0.8 percent to 2,806 points -- just above 2,805.95, the 61.8 percent Fibonacci retracement of the index's fall from an April high to a May low.

But the index is still below Monday's high and its early August high, with analysts suggesting it is stuck in a five month range.

Valuations on the STOXX Europe 600 looked cheap. Its one-year forward price-to-earnings stood at about 10.24 against a 10-year average of 13.62, Thomson Reuters Datastream showed.

Some traders were cautious ahead of triple witching, when contracts for stock index futures, stock index options and stock options all expire at the same time.

Across Europe, the FTSE 100 index was 0.8 percent higher, Germany's DAX was up 0.8 percent and France's CAC 40 rose 1 percent. (Reporting by Joanne Frearson; Editing by Jon Loades-Carter)

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