Banks push European shares to 5-week high; UBS up

* FTSEurofirst 300 index rises 0.7 percent

* UBS soars after results beat expectations

* IHG slips after Barclay brothers sell stake

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

LONDON, July 27 (BestGrowthStock) – European shares hit a five-week
high on Tuesday, gaining for a sixth consecutive session,
boosted by strong corporate earnings from banks, with UBS
(UBSN.VX: ) soaring after results beat analysts’ expectations.

By 1048 GMT, the pan-European FTSEurofirst 300 (.FTEU3: )
index of top shares was up 0.7 percent at 1,056.01 points.

The Euro STOXX 50 index (.STOXX50E: ), the euro zone’s
blue-chip index, was up 1 percent at 2,770.51 points, holding
above its 50 percent Fibonacci retracement from a high in April
to a low in May of 2,737.62 points — a key technical level
which it crossed for the first time in five weeks on Monday.

“We have had good European earnings today, with the
highlights UBS and Deutsche Bank,” said Angus Campbell, head of
sales at Capital Spreads.

“It is a much rosier picture for European equities and there
is a continuation of the good sentiment following the stress
tests last week. Banks across Europe are very bullish. For the
moment, the momentum is certainly behind the bulls.”

Banks were the top performers, with the STOXX Europe 600
Banks (.SX7P: ) surging 4.3 percent, touching its highest level in
13 weeks. UBS (UBSN.VX: ) jumped 9.4 percent, after strong
equities and currency revenues drove the Swiss bank’s
second-quarter net profit well above forecasts. [ID:nLDE66Q0FS]

Germany’s top lender Deutsche Bank (DBKGn.DE: ) rose 3.9
percent after it posted second-quarter pretax profit in line
with expectations, helped by lower loan loss provisions amid
weaker industry trends in investment banking.

According to StarMine data, 12-month forward earnings growth
for the banking sector is one of the highest at 82.6 percent,
compared to the STOXX 600 average of 26.3 percent.

Also helping the banking sector was news late on Monday that
the Basel Committee will scale back many of its proposals to
beef up bank capital and liquidity rules, signalling concessions
in the face of lobbying by banks. [ID:nLDE66P1Z2]

The results of European bank stress tests late on Friday
helped restore confidence in the sector as it contained no major
negative surprises, and showed only seven of 91 banks failed the
tests aimed at gauging banks’ ability to withstand financial
shocks.

ASTRAZENECA GAINS

In individual stocks, AstraZeneca (AZN.L: ) rose 3 percent
after U.S. Food and Drug Administration documents, released
ahead of a July 28 advisory panel, raised hopes for its
experimental blood thinner Brilinta.

Oil major BP (BP.L: ) gained 0.5 percent. It launched a plan
to repair its battered image in the United States, ditching its
chief executive and promising to slim down by trebling an asset
sale target to $30 billion. It unveiled a $17 billion quarterly
loss due to the costs of the biggest oil spill in U.S. history.
[ID:nLDE66Q09I]

On the downside, InterContinental Hotels (IHG) (IHG.L: )
slipped 7.7 percent after traders said that the billionaire
Barclay brothers have sold their 10 percent stake in the
company.

French property group Klepierre (LOIM.PA: ) fell 6 percent
after its chief executive painted a glum picture of consumer
spending for the rest of 2010. The firm reported a fall in
first-half rental income on a like-for-like basis and a fall in
net cash flow per share. [ID:nLDE66P1R1]

Across Europe, the FTSE 100 (.FTSE: ) index rose 0.7 percent,
Germany’s DAX (.GDAXI: ) gained 0.6 percent and France’s CAC 40
(.FCHI: ) was up 1 percent.

Growth Stocks

(Reporting by Joanne Frearson; Editing by Sharon Lindores)

Banks push European shares to 5-week high; UBS up