European shares rise on Greek hopes; banks up

By Joanne Frearson

LONDON (BestGrowthStock) – European shares rose on Friday, snapping two days of declines, with banking stocks rebounding from earlier falls on reports by Greek media that the country would ask for financial aid.

The market was also given support by strong earnings news. Volvo (VOLVb.ST: ) surged 12.5 percent after first-quarter profit (Read more your timing to make a profit.)s beat expectations.

By 5:01 a.m. ET, the pan-European FTSEurofirst 300 (.FTEU3: ) index of top shares was up 0.9 percent at 1,093.66 points. The index, which gained nearly 26 percent in 2009, is up only 4.6 percent this year.

“Maybe investors feel yesterday was overdone,” said Peter Dixon, economist at Commerzbank.

“There has been a little bit of corporate news and there is a general expectation that earnings are quite strong, giving Europe a bit of a lift.”

Banking stocks reversed the previous session’s sharp losses. Citing unnamed sources, Greek media said Athens is poised to trigger the European Union/International Monetary Fund financial aid package.

The sector struggled on Thursday after Eurostat said Greece’s budget deficit was worse than feared and Moody’s downgraded the country’s sovereign rating.

Greek banking stocks (.FTATBNK: ) soared 6.9 percent. HSBC (HSBA.L: ), Banco Santander (SAN.MC: ) and Barclays (BARC.L: ) gained 1.3 to 2 percent.

Royal Bank of Scotland (RBS.L: ) was up 2.9 percent after Barclays Capital said it prefers the majority state-owned bank to Lloyds Banking Group (LLOY.L: ).

ERICSSON GAINS

Shares in Ericsson (ERICb.ST: ) rose 5.6 percent as analysts focused on strong margin growth as a sign of better times ahead for the mobile telecom gear maker after it undershot estimates for first-quarter profit (Read more your timing to make a profit.).

The sector was badly hit on Thursday after Nokia (NOK1V.HE: ) results disappointed.

Chemical stocks were in demand. Dutch group Akzo Nobel NV (AKZO.AS: ) gained 4.9 percent after it posted a better-than-expected 38 percent rise in first-quarter core profit.

Miners were in favor, recovering from the previous two sessions’ sharp losses. Anglo American (AAL.L: ), Lonmin (LMI.L: ) and Rio Tinto (RIO.L: ) rose 1.2 to 1.8 percent.

In individual stocks, German sporting goods maker Adidas (ADSG.DE: ) rose 3.6 percent after it lifted its full-year profit outlook and reported better-than-expected first-quarter results.

L’Oreal (OREP.PA: ) was up 2.6 percent after the French cosmetics giant pledged to improve its results this year after first-quarter sales beat forecasts and marked a clear return to growth.

On the downside, SES (SESFd.PA: ) shares fell 5.2 percent after the world’s second-largest satellite operator cut its 2010 growth forecast and reported weaker-than-expected first-quarter figures.

Across Europe, the FTSE 100 (.FTSE: ) index was up 0.8 percent, Germany’s DAX (.GDAXI: ) was 1.1 percent higher and France’s CAC 40 (.FCHI: ) rose 0.6 percent.

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(Reporting by Joanne Frearson; Editing by Michael Shields)

European shares rise on Greek hopes; banks up