European shares hit 6-mth closing high

By Brian Gorman

LONDON (BestGrowthStock) – European shares rose for a fourth straight day to hit a six-month closing high on Tuesday, with energy companies BP (BP.L: ) and BG Group (BG.L: ) gaining after profits beat forecasts.

The energy sector was also boosted by a weaker dollar supporting crude prices, ahead of the U.S. Federal Reserve’s likely announcement of monetary easing on Wednesday.

The FTSEurofirst 300 (.FTEU3: ) index of top European shares rose 0.5 percent to 1,093.65 points, its highest close since late April. The European benchmark is up more than 69 percent from its lifetime low of March 2009, with several major economies having emerged from recession helped by stimulus from governments and central banks worldwide.

“We’re seeing a steady flow of positive earnings,” said Mark Bon, fund manager at Canada Life in London, adding other factors “pushing things forward” included a strong Chinese economy and the expectation of retailers enjoying stronger trading at Christmas.

British energy producer BG rose 3.4 percent after reporting a 12 percent rise in third-quarter net profit compared with the same period in 2009, and significantly upgrading resources at its Brazilian oil fields.

BP gained 1.8 percent after its underlying performance beat all expectations on higher refining margins and a lower tax rate. BP, the world’s biggest non-government controlled oil company by production last year, also lifted its estimate of the likely cost of its Gulf of Mexico oil spill to $40 billion, denting profits.

Other heavyweight energy shares to rise included Total (TOTF.PA: ) and Royal Dutch Shell (RDSa.AS: ), up 1.5 and 1.7 percent respectively.

The weaker dollar also boosted metals prices, sending miners higher.

Antofagasta (ANTO.L: ), Kazakhmys (KAZ.L: ) and Xstrata (XTA.L: ) rose between 3.2 and 3.5 percent.

BHP Billiton (BLT.L: ) rose 1.9 percent. Canada’s National Post reported that the country is set to approve BHP Billiton’s $39 billion bid for Potash Corp (POT.TO: ) this week, but it might impose tough conditions which could threaten the world’s biggest deal this year.

Across Europe, Britain’s FTSE 100 (.FTSE: ) ended the day 1.1 percent higher; Germany’s DAX (.GDAXI: ) and France’s CAC40 (.FCHI: ) rose 0.8 and 0.6 percent respectively.

Wall Street was higher around the time European bourses were closing. The Dow Jones (.DJI: ), S&P 500 (.SPX: ) and Nasdaq Composite (.IXIC: ) were up between 0.6 and 0.8 percent.


Danish lender Danske Bank (DANSKE.CO: ) rose 5 percent after posting a 52 percent rise in third-quarter net profit helped by a smaller-than-expected loss on loans in its home market as the economy improved.

But the banking sector was mixed. The problems of the peripheral euro zone countries are still an issue for many investors. Ireland is trying to convince investors the country does not need a Greek-style bailout.

The cost of insuring against a sovereign debt default by Ireland hit a record high on Tuesday with peripherals under pressure again and with Allied Irish Banks (ALBK.I: ) falling 1.4 percent as it struggles to sell its UK units.

Allied has lost more than 60 percent in the last three months. Bank of Ireland (BLIR.I: ) fell 3.9 percent,

Some investors were reluctant to take large positions ahead of Tuesday’s U.S. midterm elections, which could alter the balance of power in the House of Representatives, and a Fed meeting, on Tuesday and Wednesday, which is expected to include an announcement on further quantitative easing.

Markets are generally priced for the Fed to commit to buying at least $500 billion in Treasury debt over the coming months.

Back in Europe, euro zone manufacturers boosted their output in October at a faster pace than previously estimated, according to a business survey.

(Editing by Erica Billingham)

European shares hit 6-mth closing high