European shares rebound ahead of U.S. GDP data

* FTSEurofirst 300 rebounds from 7-week low; up 0.7 pct

* Banking, energy and mining shares among top gainers

* Investors await U.S. GDP data for market direction

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

By Atul Prakash

LONDON, Jan 29 (BestGrowthStock) – European equities bounced back on
Friday after hitting seven-week lows in the previous day, with
banks regaining strength and firmer crude supporting energy
shares, but investors traded cautiously ahead of U.S. GDP data.

At 1217 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.7 percent at 1,009.04 points after
falling 1.2 percent in the previous session. It has gained only
in two of eight sessions and is on course to post its worst
monthly decline since last February.

The index is down 6 percent since hitting a 15-month high on
Jan. 11, but is still up 56 percent from its record low in March
2009. The benchmark gained 26 percent last year.

Banks were among the top gainers, with DJ STOXX European
banking index (.SX7P: ) rising 1.4 percent after falling in the
past two days partly on concerns about Greece’s fiscal health.

Standard Chartered (STAN.L: ), HSBC (HSBA.L: ), Barclays
(BARC.L: ), Lloyds (LLOY.L: ), BNP Paribas (BNPP.PA: ), Societe
Generale (SOGN.PA: ) and Credit Agricole (CAGR.PA: ) were up 0.3 to
1.9 percent. Greek bank shares (.FTATBNK: ) rose 1.7 percent.

Investors awaited U.S. gross domestic product (GDP) data,
due at 1330 GMT, for a clearer market direction. A Reuters
survey has predicted that the GDP, which measures total goods
and services output within U.S. borders, expanded at a 4.6
percent annual rate, up from 2.2 percent in the third quarter.

“The authorities in the United States have been very
aggressive, innovative and proactive in terms of instituting
measures to make sure the U.S. economy starts to grow at a
steady pace. And the markets will be watching for further
evidence about the speed and strength of that recovery coming
through,” said Henk Potts, equity strategist at Barclays Wealth.

“Investors have been spooked by the fact that we have seen a
rather lacklustre earnings reason so far and companies have
failed to deliver a strong outlook. But corporate profitability
will be bouncing back strongly during the course of this year.”

Energy shares were also in demand as crude oil (CLc1: ) rose
above $74 a barrel. BP (BP.L: ), Royal Dutch Shell (RDSa.L: ), BG
Group (BG.L: ), Tullow Oil (TLW.L: ), Repsol (REP.MC: ) and Total
(TOTF.PA: ) and added 0.6 to 2.1 percent.

Across Europe, Britain’s FTSE 100 index (.FTSE: ), Germany’s
DAX (.GDAXI: ) and France’s CAC 40 (.FCHI: ) rose 0.7 to 0.9
percent.

MACROECONOMIC INDICATORS

Investors looked for signs of global economic recovery.
Germany’s Finance Ministry said robust foreign trade and firmer
investment will help keep the country’s recovery intact though
the pace of growth will likely slow from levels seen last year.
[ID:nBAF003955]

Figures showed British house prices jumped at their sharpest
pace in five months in January and consumer confidence rose more
than expected in a sign the economy got off to a good start in
the new year. [ID:nLDE60S0AB]

However, problems in countries such as Greece have forced
equity investors to stay cautious. Greek Prime Minister George
Papandreou said the country was the victim of speculators intent
on attacking a “weak link” in the euro zone and would not need
to be bailed out.

Markets are still worried Athens will not be able to service
its debt, putting pressure on the euro and raising speculation
as to whether Greece could be forced out of the currency bloc.

“We still have the situation with Greece and the problem is
shifting to Portugal. (U.S. President Barack) Obama is also
introducing a lot of anxiety,” said Philippe Gijsels, senior
equity strategist at Fortis Bank.

BHP Billiton (BLT.L: ), the world’s biggest miner, rose 1.3
percent. The miner has approved $1.93 billion in capital
expenses to spruce up rail and port facilities. [ID:nSGE60R0MC]

Anglo American (AAL.L: ), Antofagasta (ANTO.L: ), Rio Tinto
(RIO.L: ) and Xstrata (XTA.L: ) rose 0.5 to 1.5 percent.

BMW (BMWG.DE: ), the world’s biggest premium automaker, was up
3.3 percent after it forecast a modest rise in car sales this
year and confirmed it expected a 2009 pretax profit despite the
global economic crisis. [ID:nLDE60S09R]

Stock Analysis

(Additional reporting by Joanne Frearson; editing by Karen
Foster)

European shares rebound ahead of U.S. GDP data