European shares rise on technology

By Joanne Frearson

LONDON (BestGrowthStock) – European shares were higher on Thursday, with gains limited ahead of a European Union leaders meeting, while BP fell after the United States launched a legal battle against the company over the Gulf of Mexico oil spill.

Trading was expected to be volatile due to “quadruple witching,” the expiry of index and individual stock futures and options.

By 0951 GMT, the pan-European FTSEurofirst 300 index of top shares was 0.4 percent higher at 1,131.58 points, after ending its longest winning run in six months Wednesday.

“Spain is going to be the issue, with the threat of a downgrade, investors will be looking for comments from the EU meeting,” Will Hedden, a sales trader at IG Index, said.

“We do not want Spain to get bailed out. If it does, it sends a big message to investors that if an economy as big as Spain is fragile, then the euro-zone may be a risky place to do business.”

European Union leaders meet Thursday for a two-day summit, which aims to tackle the debt crisis that has enveloped Greece and Ireland and threatens to spread to Portugal and Spain.

However, Spain sold 2.4 billion euros of government bonds on Thursday, clearing its final supply hurdle of the year with a solid auction that had been billed as a test of sentiment toward the euro zone’s higher-yield issuers.

Spain’s IBEX 35 was 0.2 percent higher, but Portugal’s PSI 20 and Italy’s benchmark both fell 0.2 percent. The Peripheral Eurozone Countries Index was 0.2 percent higher.

On the downside, BP fell 2.1 percent after the Obama administration Wednesday launched a legal challenge against the company and its partners over the worst offshore oil spill in U.S. history.

On the upside, technology stocks featured among the best performers, with the STOXX Europe 600 Technology 0.7 percent higher. Mobile network equipment maker Ericsson rose 4.5 percent, with analysts attributing the gain to a positive note from Handelsbanken.


Looking at individual stocks, Carrefour rose 2.2 percent after newspaper Les Echos said the world’s No.2 retailer would decide whether to spin off or do an initial public offering of its property unit in the first half of next year.

Elsewhere, Stagecoach gained 3.7 percent after RBS upgraded its rating for the transport operator to “hold” from “sell” with an increased target price of 200 pence, up from 165 pence.

Serco Group rose 1.9 percent after the outsourcing firm said it remained on track to deliver its full-year guidance in a trading update. {ID:nWLA0991

French defense company Thales dropped 5.1 percent after its CEO made cautious comments in a newspaper interview and the UK halted negotiations on search-and-rescue helicopter procurement following a “problem” with the Thales-led bid.

“(CEO) Luc Vigneron was quoted (in French newspaper Les Echos) as saying margin progress would be slow … Secondly, the UK search and rescue was supposed to be decided this week … It is really both,” Execution Noble analyst Edward Stacey said.

Across Europe, the FTSE 100 index was 0.4 percent higher, Germany’s DAX was 0.1 percent higher and France’s CAC 40 rose 0.3 percent.

(Reporting by Joanne Frearson)

European shares rise on technology