European shares close up on results, Spain plans

By Joanne Frearson

LONDON (BestGrowthStock) – European shares gained on Wednesday, as encouraging results from financials, such as Allianz (ALVG.DE: ) and ING Groep (ING.AS: ), and Spain’s plan to cuts its deficit lifted investor sentiment.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares closed up 1.3 percent at 1,048.56 points. The index is now up 0.3 percent for the year, having dipped into negative territory in early May on euro-zone sovereign debt concerns.

Financials were among the top gainers. Germany’s Allianz jumped 3.4 percent after net first-quarter profit (Read more your timing to make a profit.) more than tripled, while Dutch bancassurer ING Groep gained 4.2 percent after first-quarter earnings beat estimates.

“Earnings results have also been very good and fundamentally that is a key support for these markets,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

“It is quite interesting that Spain has now followed through to cut its budget deficit. I guess the view is if Greece can do it then so can we. That sort of contagion is positive for the markets.”

Investor nervousness about euro-zone sovereign debt problems were eased after Spanish Prime Minister Jose Luis Rodriguez Zapatero announced civil service pay and public sector jobs cuts.

The measures are designed to bring the country’s budget deficit to 6 percent of gross domestic product in 2011 from 11.2 percent in 2009.

Banks featured among the best performers following falls in the previous session. BNP Paribas (BNPP.PA: ), UBS (UBSN.VX: ), Credit Suisse (CSGN.VX: ) and Banco Santander (SAN.MC: ) rose 0.4 to 1.5 percent.


In individuals stocks, Deutsche Telekom (DTEGn.DE: ) rose 2.9 percent after the company reported first-quarter results largely in line with expectations and reiterated its 2010 outlook.

Shipping and oil group A.P. Moller-Maersk (MAERSKb.CO: ) soared nearly 9 percent after it raised 2010 profit guidance after a forecast-beating first quarter driven by recovering freight rates and higher oil prices.

However, Aegon (AEGN.AS: ) fell 1.8 percent after the Dutch insurance group’s first quarter underlying operating profit and present value of new premium income miss or are in-line with estimates.

Macroeconomics news was mixed. The euro zone economy grew only modestly in the first quarter after stalling in the fourth, a flash estimate showed on Wednesday, but stronger than expected March industrial output suggested economic activity was picking up.

The number of Britons claiming unemployment benefit fell more than expected in April but the number out of work on the wider ILO measure rose to its highest since 1994, official data showed on Wednesday.

Across Europe, the FTSE 100 (.FTSE: ) index was up 0.9 percent as Conservative leader David Cameron took up the position of Prime Minister, at the head of a coalition government.

Germany’s DAX (.GDAXI: ) was 2.4 percent higher and France’s CAC 40 (.FCHI: ) rose 1.1 percent.

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(Reporting by Joanne Frearson; Editing by Louise Heavens)

European shares close up on results, Spain plans