Banks, miners lift European shares; earnings eyed

* FTSEurofirst 300 up 0.4 pct

* Banks gain ahead of Morgan Stanley results, miners strong

* Novo Nordisk up on U.S. setback for rivals

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

By Harpreet Bhal

LONDON, Oct 20 (BestGrowthStock) – European shares rose by midday on
Wednesday as miners rebounded on a weak dollar and banks rose
ahead of results from U.S. peer Morgan Stanley (MS.N: ) (Read more about the money market today. ), while
Novo Nordisk (NOVOb.CO: ) gained after a setback for its rivals.

Shares were also supported by minutes from the Bank of
England which reinforced expectations the central bank is edging
towards further quantitative easing. [ID:nLDE69J0S9]

“We saw a bit of buying back into the market after the Bank
of England minutes insinuated that the chances of more easing as
opposed to more tightening have now taken a step onwards,” said
Joshua Raymond, market strategist at City Index.

By 1122 GMT the pan-European FTSEurofirst 300 (.FTEU3: ) index
of top shares was up 0.4 percent at 1,086.77 points, after
slipping 0.5 percent on Tuesday.

Novo Nordisk rose 8 percent to the top of the FTSEurofirst
300 index, rebounding from losses in previous session after U.S.
health regulators declined to approve a diabetes drug being
developed by peers Amylin Pharmaceuticals (AMLN.O: ) and Eli Lilly
(LLY.N: ).

That boosted prospects for Novo’s key new product hope
Victoza.

Miners were also firmer, drawing strength from strong metals
prices as the dollar retreated following gains on Tuesday after
a surprise interest rate hike by China.

Eurasian Natural Resources (ENRC.L: ), BHP Billiton (BLT.L: )
and Xstrata (XTA.L: ) added 1.8 to 2.2 percent.

Rio Tinto (RIO.L: ) added 2 percent after it approved a $3.1
billion iron ore expansion, staking a claim to become the
world’s top producer and defying industry concerns over a new
Australian mining tax. [ID:nSGE69J01W]

Banks were also on the rise, with investors likely to focus
on results from U.S. peers Morgan Stanley (MS.N: ) (Read more about the money market today. ) and Wells Fargo
& Company (WFC.N: ) to gauge the health of the banking sector.

“A lot of traders will be sitting on their hands ahead of
the UK public spending review and also results from Morgan
Stanley and Wells Fargo and we will get a bit more volatility
once those two companies announce earnings,” Raymond said.

Barclays (BARC.L: ), BNP Paribas (BMNPP.PA: ) and Deutsche Bank
(DBKGn.DE: ) were up 1.3 to 1.5 percent.

Banks had earlier fallen on concerns lenders may be forced
to take back mortgages after investors accused Bank of America
(BAC.N: ) of inappropriately bundling some mortgages into more
than $47 billion of bonds on Tuesday.

“There are jitters after the Bank of America mortgage
foreclosure worries,” Will Hedden, sales trader at IG Index,
said.

SPENDING REVIEW EYED

Moves on the equity market were limited ahead of the British
government’s spending review due at 1130 GMT.

Britain will take an axe to its welfare state on Wednesday
as part of an 80 billion-pound ($125 billion) cut in public
spending that will dictate the future of both the economy and
the coalition government. [ID:nLDE69J0G8]

Ahead of the announcements, data showed British public
borrowing hit a record high for a month of September.
[ID:nUKLKLE665]

UK defence firms were mixed as investors digest Tuesday’s
defence review, which tightened the screws on government
spending in the sector. BAE Systems (BAES.L: ) was down 3.4
percent, also hit after going ex-dividend.

Among other individual movers, Danish wind turbine maker
Vestas Wind Systems (VWS.CO: ) fell 3.4 percent after two banks
lowered their target prices for its stock and Belgian turbine
gearbox maker Hansen Transmissions (HSNT.L: ) cuts its sales
outlook.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: )
and France’s CAC 40 (.FCHI: ) were up 0.3 to 0.4 percent.
(Additional reporting by Joanne Frearson; Editing by Michael
Shields)

Banks, miners lift European shares; earnings eyed