Banks lift Europe shares; ECB upbeat on recovery

* FTSEurofirst 300 up 0.5 pct; shakes off earlier losses

* Banks among the biggest gainers

* BoE keeps rates on hold; ECB upbeat on recovery

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

By Harpreet Bhal

LONDON, Sept 9 (BestGrowthStock) – European shares rose on Thursday,
with a key index holding above a resistance level, as banks
gained after positive comments on the economy by a European
Central Bank policymaker helped bolster investors’ confidence.

By 1101 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index of top shares was up 0.5 percent at 1,076.90 points, after
rising 1 percent in the previous session.

The Euro STOXX 50 (.STOXX50E: ), the euro zone’s blue chip
index, rose 0.5 percent to 2,766.77 points, climbing above its
50 percent Fibonacci retracement of a fall from an April high to
a May low at 2,737.62 points.

Banks were among the biggest gainers, with Barclays
(BARC.L: ), Societe Generale (SOGN.PA: ) and Credit Agricole
(CAGR.PA: ) adding 1.5 to 2.2 percent, shaking off losses from the
previous session.

ECB Governing Council member Yves Mersch said the euro zone
is on the brink of a sustainable recovery and the central bank
is likely to discuss removing some support measures at its
December meeting. [ID:nLDE6880Q3]

By contrast, the OECD said global recovery looks to be
slowing more than expected as growth weakens in rich economies,
and stimulus should be extended or stepped up if the slowdown
endures. [ID:nLDE6880LL]

Analysts said investors were likely to focus on the pace of
economic recovery in Europe and the United States in the near
term for direction for equities.

“The ECB and the Fed could start their stimulus exit
programme by mid next year and until then we will be in a
wait-and-see mode”, said Heinz-Gerd Sonnenschein, equity
strategist at Deutsche Postbank in Bonn, Germany.

“There is no clear direction at the moment. While companies
are reporting good numbers, there are still concerns over the
economic situation in southern Europe and in the U.S., and I
expect that the market will move sideways in the near term.”

Bucking a stronger banking sector, French insurer Axa
(AXAF.PA: ) fell 1.5 percent after Australia’s competition
regulator blocked National Australia Bank’s (NAB.AX: ) $12 billion
bid for AXA Asia Pacific (AXA.AX: ) for a second time, dashing
NAB’s efforts to cement its dominance in the world’s
fourth-largest wealth management market.

BOE DECISION

In a widely expected move, the Bank of England kept interest
rates at 0.5 percent for the 18th month in a row on Thursday and
announced no new quantitative easing purchases. [ID:nLAC005760]

Across the Atlantic, data likely to generate interest
include U.S. weekly jobless claims at 1230 GMT, with economists
in a Reuters survey forecast a total of 470,000 new filings
compared with 472,000 in the prior week.

On the downside, utilities E.ON (EONGn.DE: ) and RWE (RWEG.DE: )
dropped around 1 percent after German newspapers, citing an
agreement between the government and energy firms, reported that
a nuclear compromise reached on Sunday could entail higher costs
for utilities than previously known. [ID:nLDE6840EZ]

British retailers Home Retail (.HOME: ) fell 4.5 percent after
it forecast a 20 to 25 percent fall in first-half profit and a
full-year outcome in the bottom half of the current analyst
range.

Across Europe, Britain’s FTSE 100 (.FTSE: ), Germany’s DAX
(.GDAXI: ) and France’s CAC (.FCHI: ) rose 0.5 to 0.9 percent.
(Editing by Hans Peters)

Banks lift Europe shares; ECB upbeat on recovery