Europe shares drift higher; defensive stocks gain

* FTSEurofirst 300 index rises 0.1 percent

* Defensive shares in demand; financials weak

* Credit Suisse slips after saying net profit falls

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

By Atul Prakash

LONDON, Oct 21 (BestGrowthStock) – European stocks rose on Thursday
as uncertainties about company earnings and economic numbers
prompted investors to take shelter in food, beverages and
personal goods shares, traditionally seen as defensive equities.

At 0842 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.1 percent at 1,087.45 points after
falling as low as 1,079.88 points earlier in the session and
closing 0.3 percent higher in the previous session.

Food and beverages shares topped the gainers list, with the
European sector index (.SX3P: ) rising 1.2 percent after soft
drinks maker Britvic (BVIC.L: ) said its 52-week revenue grew 14.6
percent on higher volumes.

Britvic jumped more than 4 percent, while Unilever (ULVR.L: ),
Associated British Foods (ABF.L: ) and Marine Harvest (MHG.OL: )
were up 1.8 to 2.6 percent.

Investors awaited more earnings results on Thursday after
Morgan Stanley (MS.N: ) (Read more about the money market today. ) reported a surprise loss on Wednesday and
Credit Suisse (CSGN.VX: ) reported on Thursday that its
third-quarter net profit tumbled 74 percent to miss forecasts.
Credit Suisse shares were down 3.4 percent.

“Caution is still a watchword and we certainly remain very
data-sensitive,” said Keith Bowman, equity analyst at Hargreaves
Lansdown.

“But, we have got the prospect of further central bank
actions in the background and China has certainly not fallen off
the cliff as many people had predicted. There are still some
grounds for optimism.”

China’s growth ebbed in the third quarter while inflation
edged just a touch higher, showing that the world’s
second-largest economy was strong but far from overheating and
suggesting that an interest rate rise this week may be enough
for now. [ID:nTOE69K00X]

Personal and household shares, generally seen as defensive
plays, were in demand. The sector index (.SAQP: ) rose 0.7
percent, with Swatch Group (UHR.VX: ), Taylor Wimpey (TW.L: ) and
Imperial Tobacco (IMT.L: ) rising 1.6 to 2.4 percent.

Across Europe, the FTSE 100 (.FTSE: ), Germany’s DAX (.GDAXI: )
and France’s CAC 40 (.FCHI: ) rose 0.4 to 0.5 percent.

FINANCIALS DOWN

Banking shares came under pressure as Credit Suisse said
third-quarter net profit slipped as sluggish equities trading
halved investment banking earnings from the previous quarter.
[ID:LDE66I1GK]

The STOXX Europe 600 banking index (.SX7P: ) fell 0.2 percent,
while Standard Chartered (STAN.L: ), Natixis (CNAT.PA: ) and
BBVA (BBVA.MC: ) dropped 0.2 to 1.1 percent.

However, Sweden’s Swedbank (SWEDa.ST: ) jumped more than 5
percent after posting stronger-than-expected third-quarter
operating profit on sharply lower credit losses and a return to
profit in the Baltics for the first time since late 2008.

“Swedbank is clearly overcoming a lot of funding risk
through the last year … but we believe that the trough has
been reached and normalisation of funding costs over the coming
years will be a positive rather than a negative driver,” Chintan
Joshi, analyst at Nomura, said in a research note.

Investors awaited results from Nokia (NOK1V.HE: ), the world’s
largest mobile phone maker, and from U.S. firm Caterpillar
(CAT.N: ) for clues about near-term market direction.

Focus will also be on the latest weekly U.S. jobless claims
numbers, due at 1230 GMT, for fresh pointers about the health of
the world’s biggest economy.

Among individual movers, TUI Travel (TT.L: ) fell more than 7
percent. Europe’s largest travel company restated 2009 results
and said its finance chief will go after stumbling across 117
million pounds ($185 million) owed by customers that will now
have to be written off.

Europe shares drift higher; defensive stocks gain