European shares up by midday; banks, miners gain

* FTSEurofirst 300 up 0.5 percent

* Miners gain as Australia keeps interest rates unchanged

* BP down 4.8 percent after results disappoint

* For the latest stocks news, click on [STXNEWS/EU]

By Harpreet Bhal

LONDON, Feb 2 (BestGrowthStock) – European shares rose by midday on
Tuesday, with miners strong after Australia unexpectedly kept
interest rates on hold and banks gained, but weaker oil majors
weighed on the index as BP (BP.L: ) posted disappointing results.

By 1150 GMT, the pan-European FTSEurofirst 300 index
(.FTEU3: ) was 0.5 percent higher at 1,023.14 points, on track to
rise for the third straight day.

In January, the index suffered its worst monthly loss since
February 2009, but shares have rebounded more than 58 percent
since hitting a low in March last year.

Banks were among the biggest gainers in Europe, with
Barclays (BARC.L: ), HSBC (HSBA.L: ), Societe Generale (SOGN.PA: ),
BNP PARIBAS (BNPP.PA: ) and Deutsche Bank (DBKGn.DE: ) up 0.2 to 2.5
percent.

Mining stocks also gained ground, benefitting from the
Reserve Bank of Australia’s surprise decision to not raise
interest rates. In explaining its move, the central bank noted
the impact of policy tightening in China and difficult global
credit conditions [ID:nSGE61003K]

“The decision (by the Reserve Bank of Australia) to keep
interest rates on hold is obviously good for the miners… and
the sentiment today is a bit more positive than it has been last
week,” said Philip Gillett, sales trader at IG index.

Anglo American (AAL.L: ), Eurasian Natural Resources (ENRC.L: ),
Kazakhmys (KAZ.L: ), BHP Billiton (BLT.L: ) and Xstrata (XTA.L: ) were
up 2.6 to 3.9 percent, while Rio Tinto (RIO.L: ) added 3.6
percent, helped by Citigroup upgrading its rating to “buy” from
“hold”.

The broker also raised earnings forecasts for several
companies in the sector, based on an upbeat view on metals
prices.

On the downside, index heavyweight BP (BP.L: ) slumped 4.8
percent after reporting a lower than forecast 33 percent rise in
fourth-quarter replacement cost profit and said an operational
turnaround could slow this year. [ID:nLDE61105O]

Other energy companies to fall included Total (TOTF.PA: ), ENI
(ENI.MI: ), and Royal Dutch Shell (RDSa.AS: ), which shed 0.1 to 0.9
percent.

Across Europe, Britain’s FTSE 100 (.FTSE: ), France’s CAC
40 (.FCHI: ) and Germany’s DAX (.GDAXI: ) were up 0.4 to 0.8
percent.

ARM STRONG

Chip designer ARM Holdings (ARM.L: ), whose results beat
forecasts, rose 4.4 percent, boosting its hopes of re-entering
Britain’s FTSE 100 by replacing Cadbury (CBRY.L: ) which will drop
out when it is taken over by Kraft Foods (KFT.N: ). [nLDE60S0T5]

Shares in Mobistar (MSTAR.BR: ) and Belgacom (BCOM.BR: ) fell
5.8 percent and 3.1 percent respectively after Belgium’s
telecoms watchdog said it wanted the country’s mobile phone
operators to halve the charges for routing calls this year.
[ID:nLDE61105F]

Meanwhile, world No.1 insulin maker Novo Nordisk (NOVOb.CO: )
fell 1.7 percent even as higher sales of a new diabetes drug
helped it to post a smaller drop than expected in fourth-quarter
operating profit and raise its 2010 outlook. [ID:nLDE61109Z]

Earlier, data showed German retail sales edged up in
December after falling more than twice as far in November,
making little ground in the final quarter of 2009 and suggesting
private consumption will contribute little to growth this year.
[ID:nLDE6110A2]

Investors’ attention will turn to pending homes sales data
from the United States, due at 1500 GMT. Investors will also
assess White House adviser Paul Volcker’s testimony to the
Senate Banking Committee on the administration’s proposal to
limit risk-taking by banks, which triggered a sell-off in
equities when it was first unveiled last month.

According to the testimony obtained by Reuters, Volcker will
urge Congress to curb the risks taken by large banks to help
prevent them from being treated as “too big to fail”.
[ID:nN01217116]

U.S. stock index futures pointed to a higher opening on Wall
Street, with futures for the S&P 500 (SPc1: ) and Dow Jones (DJc1: )
both up 0.3 percent, while futures for the Nasdaq 100 (NDc1: )
were 0.2 percent higher.

Stock Market News

European shares up by midday; banks, miners gain