Europe shares near 2-yr high after US jobs report

* FTSEurofirst 300 up 0.4 pct, near two-yr highs

* Miners gain on stronger metals prices

* Financials slip; RBS sees market conditions challenging

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

By Brian Gorman

LONDON, Nov 5 (BestGrowthStock) – European shares rose close to a
two-year high on Friday, with miners among the biggest gainers,
after a key report showed the U.S. labour market was stronger
than expected.

But banks capped gains for key indexes, after Royal Bank of
Scotland (RBS.L: ) reported a loss, and euro zone debt worries
resurfaced.

U.S. employment increased more than expected last month as
private companies hired workers at the fastest pace since April,
offering more signs of an up-tick in a sluggish economy.
[ID:nN04265378]

“It was a stunning turnaround but you have to question
whether it is sustainable,” said Peter Dixon, economist at
Commerzbank. “But for now, with the quantitative easing (QE)
announced on Wednesday, it is a win-win for equities.”

By 1242 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.4 percent at 1,111.36 points, the
highest since mid-April, and less than 0.4 percent off a
two-year high.

The index surged 1.7 percent on Thursday on the U.S. Federal
Reserve’s decision to buy $600 billion in government bonds to
help the U.S. economy.

LONDON COPPER HITS 27-MONTH HIGH

Miners were among the best performers on Friday, as metal
prices rallied sharply with Shanghai zinc jumping 5 percent and
London copper rising to fresh 27-month highs. Traders said it
was partly a delayed reaction to QE.

Eurasian Natural Resources Corp.(ENRC.L: ), Fresnillo (FRES.L: )
and Vedanta (VED.L: ) rose between 1.2 and 3.2 percent.

However, Spanish banking shares Banco Santander (SAN.MC: ) and
BBVA (BBVA.MC: ) fell 2.9 and 1.7 percent respectively, dragged
lower by fears about the instability of the peripheral euro zone
economies and the risk of more capital hikes in the sector.
[ID:nWEA7458]

Euro zone peripheral debt “is coming back as an issue and
some of the Greek and Spanish banks are underperforming,” said
Colin McLean, managing director at fund manager SVM in
Edinburgh.
Bank of Ireland (BKIR.I: ) fell more than 10 percent, and has
lost half its value in the last three months, on worries about
the state of the Irish economy.

The Irish government side-stepped questions on Friday about
when it would unveil a four-year austerity plan amid speculation
it would delay publishing the measures in the run-up to a
by-election.

“We have Ireland with a real estate problem, which is much
bigger than expected, and people extrapolate that to the rest of
the euro zone,” said a Madrid-based trader.

Royal Bank of Scotland (RBS.L: ) fell 4.5 percent after it
said it expected challenging market conditions in the fourth
quarter, and a UK bank tax would add up to 250 million pounds to
its costs next year. [ID:nLDE6A31SL]

HSBC (HSBA.L: ) fell 1.8 percent, even after saying profits so
far this year are “well ahead” of 2009 levels. Analysts at
Matrix said the update was “quite weak” and that it expects
consensus downgrades.

Across Europe, Britain’s FTSE 100 (.FTSE: ), France’s CAC40
(.FCHI: ) AND Germany’s DAX (.GDAXI: ) rose between 0.2 and 0.4
percent.

Spain’s IBEX (.IBEX: ) was 1 percent lower.
Back in the U.K., drugmaker GlaxoSmithKline (GSK.L: ) rose 2.2
percent as worries about generic competition to its best-selling
Advair lung drug eased, following comments from Israeli-based
drugmaker Teva (TEVA.O: ).

Smith & Nephew (SN.L: ) gained 6.1 percent after the
orthopaedic products firm reported third-quarter results, with
Seymour Pierce keeping its “buy” rating on a “well-positioned
medtech story.”
(Additional reporting by Simon Falush; Editing by Sharon
Lindores)

Europe shares near 2-yr high after US jobs report