Europe shares flat after hitting near 19-month high

* FTSEurofirst 300 little changed after hitting highs

* Banks turn positive after Bank of America results

* Airline shares under pressure on flight chaos

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

By Atul Prakash

LONDON, April 16 (BestGrowthStock) – European equities were little
changed by midday on Friday after climbing to their highest in
nearly 19 months, with banking shares turning positive after
soothing results from Bank of America (BAC.N: ).

The market was capped following a drop in airline stocks as
a huge ash cloud from an Icelandic volcano caused further air
travel chaos across Europe on a scale not seen since the Sept.
11 attacks, leaving hundreds of thousands of passengers
stranded. [ID:nSGE63F02E]

At 1139 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was flat at 1,112.18 points after rising to
1,115.03, the highest since September 2008. The index has jumped
72 percent since a record low in March 2009 and is on track to
post its seventh straight week of gains.

“In the short term, there is room for the market to move
even a bit higher because the Q1 earnings season will be a good
one. I would also expect the macro-economic momentum to stay
fairly high for the time being,” said Klaus Wiener, head of
research at Generali Investments in Cologne.

General Electric (GE.N: ), the largest U.S. conglomerate,
reported a sharply higher profit than Wall Street had expected
and sees “potential for upside” to its earlier forecast of flat
2010 results. [ID:nN16249166]

Banking shares turned positive after Bank of America
reported higher-than-expected first-quarter earnings, as five of
the company’s six major business units were profitable in the
period. [ID:nN16232262]

The European bank index (.SX7P: ) was up 0.4 percent, while
Standard Chartered (STAN.L: ), Barclays (BARC.L: ), Lloyds (LLOY.L: ),
Societe Generale (SOGN.PA: ) and Credit Suisse (CSGN.VX: ) rose 0.7
to 2.8 percent. Royal Bank of Scotland (RBS.L: ) jumped 8.6
percent after BofA Merrill Lynch hiked its target and said the
shares could double on a two-year view.

“We still believe RBS is one of most geared banks into
recovery in Europe. We think it can turn a profit in 2010 and
that profitability can recover strongly thereafter driven by
rising margins, tight cost control and falling bad debts,”
Merrill said in a note.

AIRLINES GLIDE LOWER

Airline stocks fell as about 17,000 flights were expected to
be cancelled on Friday due to the dangers posed by clouds of
volcanic ash from Iceland, with airports in Britain, France,
Germany, and across Europe closed until at least Saturday.

Lufthansa (LHAG.DE: ), British Airways (BAY.L: ), Air Berlin
(AB1.DE: ), Air France-KLM (AIRF.PA: ), Iberia (IBLA.MC: ) and Ryanair
(RYA.I: ) were down 1.2 to 2.1 percent.

Despite a rise in the FTSEurofirst 300 index to new highs,
analysts said the market remained cautious.

“Some of the caution is probably related to the fact that we
have seen already quite a significant upward move in the last
days. People want to see a confirmation of this upward move
which could come from the first quarter earnings season, which I
expect to be a fairly decent one,” said Wiener of Generali.

“The question whether Greece will need to tap the funds,
which have been provided by the European Union and the IMF,
continues to be a drag on markets.”

European finance ministers discussed Greece’s debt crisis
but said Athens was seeking to clarify how an emergency aid
mechanism would work, rather than requesting it. [ID:nLDE63F0TH]

Industrial shares were in demand, with SKF (SKFb.ST: ), the
world’s biggest bearing maker, jumping 8.1 percent as it
reported better-than-expected first-quarter results. It’s peer
engineering group Sandvik (SAND.ST: ) gained 7.1 percent.

Among individual stocks, Carrefour (CARR.PA: ) gained 2.7
percent after it posted its first rise in underlying quarterly
sales for 18 months and unveiled a 1.6 billion euro share
buyback to reflect confidence in its recovery plan.

Investing Basics

(Editing by Jon Loades-Carter)

Europe shares flat after hitting near 19-month high