REFILE-European stocks head for 2 pct gain on the week

(Corrects typographical error in headline)

* FTSEurofirst 300 up 0.2 pct

* China’s rise in required reserves keeps gains in check

* Peripherals in red as euro zone debt worries persist

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

By Blaise Robinson

PARIS, Dec 10 (BestGrowthStock) – European stocks edged higher on
Friday, on track to post their biggest weekly gain since early
November, but the rise was limited by profit-taking in shares of
financial institutions after a sharp 10-day rally.

Gains were also kept in check by lingering concerns over
China’s efforts to tighten monetary policy after the country’s
central bank raised lenders’ required reserves by 50 basis
points, its sixth increase this year. [ID:nTOE6B907U]

At 1220 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.2 percent at 1,125.72 points, not far
from a two-year high hit in the previous session.

The benchmark index was on track to record a weekly gain of
2 percent, its biggest weekly gain since early November.

“Traditionally, December is a bullish month, and all the
technical signals are saying this month won’t be different,”
said Vincent Ganne, analyst at IG Markets, in Paris.

“Overall, the CAC should outperform the DAX this month as
construction, banks and insurance rebound while there will be
profit-taking in auto stocks after stellar gains. For
peripherals, it’s still too risky. I wouldn’t bet on a rebound
in these markets.”

Spain’s IBEX 35 (.IBEX: ) was down 0.7 percent as nervous
investors book profits on banking stocks such as Santander
(SAN.MC: ), down 2.3 percent, Banco de Sabadell (SABE.MC: ) down 1.9
percent and BBVA (BBVA.MC: ) down 1.8 percent after strong gains.

In a research note, UBS analysts quantified further
potential capital requirements for Spanish banks at up to 120
billion euros.

“Sovereign concerns have eased, but we think they may
persist until larger provisioning buffers and stronger capital
are rebuilt in the financial sector,” UBS analysts wrote.

The Peripheral Eurozone Countries Index (.TRXFLDPIPU: ) was
down 0.3 percent.

Big insurance stocks also lost ground on Friday following a
brisk rally over the past few days, with AXA (AXAF.PA: ) losing
1.7 percent and Aegon (AEGN.AS: ) falling 1.3 percent.

Mining stocks moved in the opposite direction, with Xstrata
(XTA.L: ) up 1.5 percent, rising along with metal prices after
strong imports data from top consumer China.


So far this year, the auto sector (.SXAP: ) has surged 50
percent, the basic resources sector (.SXPP: ) is up 24 percent,
while the insurance sector (.SXIP: ) is up 3.2 percent and the
banking sector (.SX7P: ) is down 7.5 percent.

Similar divergences exist between benchmark indexes across
Europe, with Germany’s DAX (.GDAXI: ) up 18 percent so far this
year, the FTSEurofirst 300 up 7.6 percent, UK’s FTSE 100 (.FTSE: )
up 7.2 percent, France’s CAC 40 (.FCHI: ) down 1.9 percent,
Spain’s IBEX down 15 percent and Greece’s ATG (.ATG: ) down 31

Irish banks took a beating on Friday, with Bank of Ireland
(BKIR.I: ) down 4.2 percent. Fitch downgraded credit ratings on
Irish banks a day after stripping Ireland of its ‘A’ credit
status following Dublin’s request for an EU/IMF bailout.

Overall, the FTSEurofirst 300 has gained nearly 7 percent
over the past two weeks as a brightened U.S. economic outlook
eclipsed worries over euro zone debt.

“I don’t expect the rises to last. Just because we have seen
a lull in the euro zone debt crisis does not mean it is all
over. I would be wary about the recent rises,” said Jeremy
Batstone-Carr, head of equities at Charles Stanley.

(Additional reporting by Joanne Frearson in London; Editing
by Erica Billingham)

REFILE-European stocks head for 2 pct gain on the week