Banks, BP boost European shares

* FTSEurofirst 300 index up 0.9 percent

* Banks rebound from earlier falls; BP rises

* Man Group sinks on GLG deal worries

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

By Joanne Frearson

LONDON, May 17 (BestGrowthStock) – European shares were higher at
midday on Monday, led by banks shrugging aside earlier falls on
euro zone debt fears and energy shares buoyed by BP (BP.L: ),
which said it was making progress containing an oil spill.

By 1058 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index was up 0.9 percent at 1,023.18 points, having been as low
as 1,006.26 earlier in choppy trade.

The index, which rose nearly 26 percent in 2009, has
struggled this year to gain ground and is down 2.1 percent on
sovereign debt worries in the euro zone peripheral economies.

Banks featured among the best performers on Monday. HSBC
(HSBA.L: ), Standard Chartered (STAN.L: ), Credit Suisse (CSGN.VX: )
and Deutsche Bank (DBKGn.DE: ) rose 1.7 to 4.8 percent.

Italy’s Banco Popolare (BAPO.MI: ) soared 8.4 percent and was
briefly suspended from trading because of excessive gains. Late
on Friday, the company reported first-quarter net profit that
beat analysts expectations.

“The rally has come as a real surprise as all the futures
were indicating a down day,” said Jim Wood Smith, head of
research at Williams de Broe. “The fact that everything is up
has caught people off guard, maybe it’s an encouraging sign.

“Although the indices are mostly up it does not feel like it
has a lot of conviction. It has a feeling like it is a weak
rally as there has been no news to suggest the debt concerns
have changed. All those issues are still there.”

On Sunday, German Chancellor Angela Merkel said that a $1
trillion EU bailout plan had only bought the euro zone time to
tackle its fundamental problem — a yawning gap between its
strongest and weakest economies. [ID:nLDE64F0FQ]

BP RISES

The energy sector received a boost as BP rose 2.4 percent
after it said it made some progress to contain an oil leak in
the Gulf of Mexico, its first success at controlling the flow of
oil into the sea since an explosion on April 20.

Among other individual stocks, German chipmaker Infineon
(IFXGn.DE: ) gained 3.2 percent, buoyed by a report in the
Financial Times Deutschland that the company is in talks with
U.S. peer Intel (INTC.O: ) to sell its wireless chip unit.

Real estate investment trust (REIT) British Land (BLND.L: )
rose 3.1 percent after Panmure Gordon raised its rating to “buy”
from “hold”, ahead of results due on Tuesday.

On the downside, Man Group (EMG.L: ) slipped 6.6 percent,
falling to their lowest level in a year, as investors fretted
about the value of a deal by the hedge fund to buy rival GLG
Partners (GLG.N: ) and uncertainties surrounding risk.

Britain’s Prudential (PRU.L: ) fell 2.3 percent after it
launched a $21 billion rights issue to help finance its
acquisition of AIG’s (AIG.N: ) Asian insurance business.

Across Europe, the FTSE 100 (.FTSE: ) index was up 1
percent, Germany’s DAX (.GDAXI: ) gained 1.1 percent and France’s
CAC 40 (.FCHI: ) rose 0.7 percent.

Stock Market Research

(Editing by David Cowell

Banks, BP boost European shares