European shares rise on U.S. earnings optimism

* FTSEurofirst 300 rises 1.7 pct, up for sixth day

* BP extends winning run on hopes it can contain oil spill

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

By Brian Gorman

LONDON, July 13 (BestGrowthStock) – European shares rose on Tuesday,
extending a rally into a sixth session, after Alcoa (AA.N: ) got
the second-quarter U.S. earnings season off to a strong start,
and BP (BP.L: ) extended a recent rally.

At 0929 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 1.7 percent at 1,043.10 points, after
rising more than 6 percent in the previous five sessions.

The index is still down more than 6 percent from its April
peak, on worries about debt levels in Europe and slowing
economic growth.
Alcoa, the largest U.S. aluminium producer, lifted its
outlook for global consumption of the metal and posted strong
quarterly results, fuelling optimism that others will follow
suit in this reporting season.

The company’s shares rose in after-hours trade, with Wall
Street finishing marginally higher on Monday, in light volumes.

Norwegian aluminium producer Norsk Hydro (NHY.OL: ) rose 3.5
percent on Tuesday.

“Alcoa was better than expected but markets are waiting for
the real flow of information as earnings season hasn’t really
got going yet,” said Bernard McAlinden, investment strategist at
NCB Stockbrokers in Dublin.

“The cyclical bull market is intact, though that’s become
questionable based on what 200-day moving averages are doing.”

JP Morgan (JPM.N: ) and Google (GOOG.O: ) are among other U.S.
companies reporting later this week.

BP (BP.L: ) shares, which have fallen 38 percent from an April
peak, rose 3.7 percent, extending a recent gain that saw the
shares close at their highest in more than a month on Monday.

The company hopes to finally stop the flow of oil spewing
from the floor of the Gulf of Mexico, after the worst offshore
oil spill in U.S. history. [ID:nN13221621]

Across Europe, Britain’s FTSE 100 (.FTSE: ), Germany’s DAX
(.GDAXI: ) and France’s CAC40 (.FCHI: ) rose between 1.2 and 1.4
percent.

Portugal’s PSI20 (.PSI20: ) was flat, paring earlier losses,
after Moody’s Investor Service cut the country’s debt by two
notches to A1.

Some analysts played down the significance of the downgrade.
“They’re stating the obvious,” said Michael Hewson, analyst
at CMC Markets. “The market is fully aware of what the situation
is in Portugal and Greece.”

“What it does do is to re-focus the market’s attention on
the banks’ stress tests coming up.”

Banks were mostly higher, with Barclays (BARC.L: ), BBVA
(BBVA.MC: ) and Deutsche Bank (DBKGn.DE: ) up between 1.4 and 3.1
percent.

Chinese stocks (.SSEC: ) fell 1.6 percent on reports that
Beijing will not relax tougher property measures any time soon.
China is looking to rein in real estate speculation.

The mining sector recovered from an earlier fall to join the
broad rally in stocks, even with lower prices for copper and
other metals, as the dollar strengthened.

Antofagasta (ANTO.L: ), Fresnillo (FRES.L: ) and Vedanta (VED.L: )
rose between 1.4 and 2 percent.

L’OREAL RISES

Among other individual companies, luxury cosmetics group
L’Oreal (OREP.PA: ) rose 1 percent after posting higher revenue in
the second quarter, helped by emerging markets and a weaker
euro, confirming a recovery in consumer spending that started
earlier this year.

In a move closely watched by financial markets, Greece’s
Public Debt Management Agency (PDMA) sold 1.625 billion euros
($2.03 billion) of six-month T-bills, its first debt sale since
a giant European Union/International Monetary Fund emergency
loan backstop was agreed in May.

German analyst and investor sentiment fell in July by more
than expected to its lowest since April 2009, a closely watched
survey showed.

The Mannheim-based ZEW economic think tank’s monthly poll of
economic sentiment fell to 21.2 from 28.7 in June, compared with
a consensus forecast of 25 in a Reuters poll. A separate gauge
of conditions rose to 14.6 from -7.9 in June. A reading of -1.5
had been forecast.
(Editing by Sharon Lindores)

European shares rise on U.S. earnings optimism