European shares gain for 3rd day on banks, data

* FTSEurofirst 300 rises 1.2 percent, up for third day

* Banking stocks rally as stress test details emerge

* BoE, ECB keep rate on hold

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

LONDON, July 8 (BestGrowthStock) – European shares gained ground on
Thursday with investors scooping up battered banking stocks as
details of the sector’s stress tests started to emerge, adding
to a tentative recovery from a sharp two-week sell-off.

The European Central Bank and the Bank of England both held
interest rates on hold, as widely expected.

ECB President Jean-Claude Trichet said that, on the upside,
the global economy and foreign trade may recover more strongly
than projected, thereby further supporting euro zone exports.

“On the downside, concerns remained relating to renewed
tensions in financial markets with possible further adverse
effects on financial conditions and confidence,” he said at a
news briefing.

At 1326 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 1.2 percent at 1,017.93 points, gaining
ground for the third session in a row.

The Euro STOXX 50 (.STOXX50E: ) was up 1.3 percent at 2,669.01
points, hovering around a key resistance level at 2,669.29, the
38.2 percent retracement level of the index’s high in April and
its low in May.

“We’re getting bits and pieces on the stress tests,
officially or from anonymous sources talking to the media, but
the bottom line is the whole thing is getting more transparent,”
Thebault said.

“We’re not sure yet how tough the tests will be in pricing
in potential haircuts, but anyway the market is already pricing
in the risks of haircuts and liquidity risks.”

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a Take-a-Look on stress tests: [ID:nLDE6601T6] For a Take a Look on outlook for markets: [ID:nLM7620] For Breakingviews column on the tests: [ID:nLDE6670DZ] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The Committee of European Banking Supervisors, conducting
the tests, said on Wednesday 91 banks across Europe were taking
part, including many regional banks seen as the weakest.

However the committee fell short of giving details on what
exactly was included in the tests in terms of potential haircuts
on sovereign debt in the euro zone.

“When the market has been oversold and you’re faced with an
event which you are not sure about, it is wise to buy the market
as you could be sitting on a nice profit,” said Philippe
Gijsels, head of research at BNP Paribas Fortis Global Markets.

Banking stocks, which feature among the worst performers so
far this year, rallied strongly on Thursday, with Natixis
(CNAT.PA: ), Dexia (DEXI.BR: ) and Deutsche Bank (DBKGn.DE: ) up 3.5
to 4.2 percent.

Sentiment also improved after data showed new U.S. claims
for unemployment insurance fell more than expected last week,
while the number of people continuing to receive benefits in the
final week of June was the lowest in seven months.

Several top retail chains reported better-than-expected June
same-store sales. [ID:nN07157763] [ID:nN07207305]
(Reporting by Atul Prakash and Blaise Robinson; Editing by Hans
Peters)

European shares gain for 3rd day on banks, data