By Amanda Cooper
LONDON, Feb 1 (Reuters) - European share prices rose on
Friday, led by mining shares after a Chinese group bought a
stake in bid target Rio Tinto <RIO.L> and by banks ahead of key
U.S. jobs data due later in the session.
Rio was the top gainer in Europe, up 10 percent after
Chinese aluminium producer Chinalco said it had bought a 12
percent stake in the company jointly with U.S. producer Alcoa
<AA.N>, which lifted the entire sector.
Meanwhile shares in troubled French bank Societe Generale
<SOGN.PA> rose 3 percent after a report that local rival Credit
Agricole <CAGR.PA> had hired advisors to consider a possible
takeover approach.
By 0910 GMT the FTSEurofirst 300 index <> of top
European shares was up 1.3 percent at 1,346.1points. Advancing
issues outnumbered decliners by 14 to one.
The index closed flat on Thursday after swinging between
losses of 2.6 percent and a gain of 0.2 percent and U.S. stocks
surged once bond insurer MBIA <MBI.N> offered reassurance on its
profitability.
"If the markets decide to return to fundamentals for a
change, which is not something they've been doing recently,
they're doing okay," said Edmund Shing, a strategist at BNP
Paribas in Paris.
"Guidance may not be fantastic but it's certainly not
telling you there is a recession coming."
The FTSEurofirst has fallen by about 11 percent so far this
year, after having posted its worst monthly performance since
September 2002 as concern about the outlook for the U.S. economy
has grown.
JOBS, JOBS, JOBS
The U.S. jobs figures are due at 1330 GMT and are expected
to show a rise of 80,000 in the number of workers on non-farm
payrolls, after December's shock rise of just 18,000, which
preceded the Federal Reserve's first emergency rate cut on Jan
22.
Within the mining sector, Rio suitor BHP Billiton <BLT.L>
was up 7.3 percent, while Antofagasta <ANTO.L> was up 5.8
percent and Vedanta Resources <VED.L> rose 4.1 percent.
Lehman Brothers confirmed it had bought shares in Rio for
Chinalco at 60 pounds a share. The move comes days ahead of a
deadline for BHP, the world's largest mining company, to make a
firm offer for Rio or drop its proposed takeover.
The surge in mining stocks helped push up London's FTSE 100
index <> by 1.6 percent, while Frankfurt's DAX <>
rose 1.4 percent and Paris' CAC 40 <> gained 1.7 percent.
Swedish telecoms equipment maker Ericsson <ERICb.ST>
reported a drop in fourth-quarter operating profit to 7.6
billion Swedish crowns ($1.20 billion), missing analysts'
estimates for a 7.9 billion crown profit.
The firm also unveiled plans to cut annual costs by 4
billion crowns with full effect from 2009. []
Ericsson shares pared early losses and rose 0.3 percent.
"In the P&L (results) there's one weak spot and that's the
multimedia division with much bigger losses than the consensus
was looking for. Everybody was looking for a small operating
profit," said Thomas Langer at West LB.
"But that's the only thing that somewhat spoiled the P&L.
All the core businesses performed in line and maybe networks was
a bit better than expected, especially on the top line. On the
positive side I would highlight the operating cash flow which
was much stronger than we expected."
Banks featured among gainers after taking a beating the day
before as concern mounted about the outlook for some of the top
U.S. bond insurers.
HSBC <HSBA.L> rose 1.7 percent, while Royal Bank of Scotland
gained 1.4 percent and Spain's Banco Santander <SAN.MC> gained
1.1 percent.
Among decliners was Swiss agrochemicals company Syngenta
<SYNN.VX>, which fell 2.5 percent after a broker downgrade.
(Editing by Greg Mahlich)
