European shares rise for second day

LONDON (BestGrowthStock) – European shares reversed early losses to close higher on Wednesday, with banks surging after State Street (STT.N: ) said earnings would beat forecasts, and on optimism stress tests might not be as bad as feared.

The FTSEurofirst 300 (.FTEU3: ) index of top European shares rose 1.3 percent to a provisional close of 1,003.87 points, after falling to as low as 976.63 earlier in the session. The index has risen 3.9 percent in two sessions, but is still down 10 percent from a mid-April peak, on worries about debt levels in Europe and economic growth.

Spanish banks featured among top gainers, with heavyweights Banco Santander (SAN.MC: ) and BBVA (BBVA.MC: ) up 6.7 and 6.6 percent respectively.

“State Street’s statement makes people think banking earnings will be good for the quarter,” said Joshua Raymond, market strategist at City Index. “And there’s hope of transparency on the stress tests.”

State Street (STT.N: ), the world’s second-largest custody bank, forecast its second-quarter operating earnings to beat analysts’ expectations, which reinforced hopes of strong earnings from some financials and sent the bank’s shares up more than 10 percent.

(Reporting by Brian Gorman)

European shares rise for second day