By Amanda Cooper
LONDON, Jan 10 (Reuters) - European shares rose early on
Thursday after British grocer J Sainsbury <SBRY.L> helped soothe
some of the brewing concern over the retail sector, while banks
edged up ahead of two central bank rate decisions.
Shares in Sainsbury rallied 4.2 percent after Britain's
third-largest supermarket chain met analysts' expectations with
its quarterly trading figures, while Germany's Metro <MEOG.DE>
jumped 7 percent after it posted strong quarterly sales.
The two reports lifted the DJ Stoxx index of European
retailers <.SXRP> 1.7 percent after it shed over 5.5 percent on
Wednesday, when Marks & Spencer <MKS.L> reported its first
quarterly drop in sales in two years.
Retailing is one of the worst performing sectors so far in
2008 as fear of a slowdown in consumer spending in Britain and
the United States has dragged on sentiment.
By 0901 GMT the FTSEurofirst 300 index <> of top
European shares was up 0.3 percent at 1,453.09 points, having
risen by as much as 0.6 percent in early trade.
The index fell 1.2 percent on Wednesday, but rallied from
the day's lows as U.S. stocks gained thanks to a broad push into
traditional defensive sectors such as healthcare.
"Quite frankly, we want to see some better macro data and
also company results are starting to come out now," said Edmund
Shing, a strategist at BNP Paribas in Paris.
"We want to see some reassurance that the world is not going
to hell before we can bounce back more meaningfully."
Also in the consumer sector, Danish brewer Carlsberg
<CARLb.CO> said it would not attempt a hostile bid for takeover
target Scottish & Newcastle <SCTN.L>, which on Thursday rejected
a revised joint bid from the Danish brewer and Heineken
<HEIN.AS>
S&N shares were last up about 1 percent, while Carlsberg and
Heineken shares fell between 0.3 and 1.3 percent. Traders said
that the gain in S&N was limited and stock in the bidders was
down because there were fears the deal would fall through.
BANKS GAIN
With the European Central Bank expected to keep euro zone
rates at 4.00 percent and a decision from the Bank of England
that could either see a cut to the 5.5 percent benchmark rate or
no move, banks were the top performing sector.
Royal Bank of Scotland <RBS.L> rose 1.7 percent, Barclays
<BARC.L> gained 1.3 percent, while BNP Paribas <BNPP.PA> rose
0.3 percent and Societe Generale <SOGN.PA> gained 1 percent.
London's FTSE 100 index <> gained 0.3 percent, while
Frankfurt's DAX <> rose 0.4 percent and Paris' CAC 40
<> was 0.3 percent ahead.
The European market has lost 3.5 percent so far this year,
in line with a poor performance on Wall Street as investors
struggle to determine the risk of recession in the U.S. economy
after a year of record high commodity prices, a credit crunch
and a battered housing market.
"The BoE is once again the high-risk call among the two
major European central banks today," said Lena Komileva, G7
economist at Tullett Prebon.
"The stock market has weakened sharply in the run-up to this
meeting amid escalating concerns about the health of the UK
economy and the G7 overall, although much of this is contagion
from the U.S. where the market is now discounting a 50 bps rate
cut by the Fed later this month."
Defensive stocks benefited yet again from the sweep into
perceived safety. French utility Suez <LYOE.PA> rose 1.3
percent, while Germany's E.ON <EONG.DE> gained 0.6 percent,
ranking them among the top ten positive weights on the
FTSEurofirst 300.
Healthcare stocks rallied further. Novo Nordisk <NOVOb.CO>
gained nearly 3 percent, while Astrazeneca <AZN.L> gained 0.3
percent and Roche <ROG.VX> rose 0.7 percent.
Among decliners, oil and gas companies fell, with BP <BP.L>
shedding 1.2 percent, which made it the heaviest negative weight
on the index, while Royal Dutch Shell <RDSa.AS> fell 0.7 percent
and Total <TOTF.PA> eased 0.3 percent.
(Editing by David Cowell)
