By Amanda Cooper
LONDON, April 15 (Reuters) - European shares rose on Tuesday
after five days of losses, buoyed by gains in food retailers as
Tesco <TSCO.L> delivered upbeat results while in the energy
sector stocks were boosted by record oil prices.
Also helping oil stocks was the discovery of an offshore
find by Repsol <REP.MC> and BG Group <BG.L> along with Brazil's
Petrobras which may be the largest in 30 years.
The broader European equity market got a boost from U.S.
data that showed wholesale inflation pressures remained under
control in March, while a measure of regional factory activity
showed a degree of stabilisation.
Tesco, the world's third-largest retailer, was one of the
largest positive influences on the European market, up 7.3
percent after it met forecasts with an 11 percent rise in annual
profit and said it had made a strong start to its new year.
The FTSEurofirst 300 index <> of major European shares
rose 0.5 percent to 1,281.62 points, having swung between a gain
of 1.2 percent and a loss of 0.3 percent. The index had lost
about 3.5 percent in the previous five sessions.
A 6 percent drop in shares of U.S. financial services firm
State Street <STT.N> after the company's CFO said it faced "two
unrealised losses" hit Wall Street and kept alive concerns in
Europe about the fallout from the credit crunch.
"The whole big picture is the subprime issue and the banks,
and (the question is) have we got to the bottom of the
writedowns?" said Andrea Williams, head of European equities at
Royal London Asset Management.
The DJ Stoxx index of European retailers <.SXRP> was up 1.7
percent, making it the best performer out of the 18 sectoral
indices. Other retailers such as Germany's Celesio <CLSGn.DE>
and Metro <MEOG.DE> rose between 2.4 and 2.9 percent.
Swedish clothing retailer H&M <HMb.ST> gained 1.6 percent
despite reporting an 8 percent fall in turnover in established
stores in March. Overall sales rose 3 percent.
FTSE OUTPERFORMS
Across Europe, British shares outperformed their German and
French counterparts, helped in large part by gains in Tesco, BG
Group and AstraZeneca <AZN.L>, which rose 7 percent after
settling U.S. patent litigation against India's Ranbaxy
Laboratories <RANB.BO> over ulcer pill Nexium.
In London, the FTSE 100 <> was up 1.3 percent, while
Germany's DAX <> and France's CAC <> rose 0.5 and 0.3
percent, respectively.
The rise in crude oil futures to fresh record highs above
$113 a barrel <CLc1> added to the bullish sentiment in the oil
and gas and oil services sectors.
BG Group shares rose 5.4 percent, while Repsol gained nearly
10 percent, making it one of the top gainers on Madrid's IBEX
index <>.
"(The find) is bringing home the importance of the cycle for
all those companies potentially being longer and the
opportunities that brings so that's given a boost to all the
services stocks," Royal London's Williams said.
Shares in France's Technip <TECF.PA> gained 3.6 percent.
Tuesday marked the first rise in many major European indexes
in over a week, as concern lingers about the impact of the
global credit crunch on the wider economy and corporate
profitability.
"We're in the middle of nowhere, with the good mood of the
market diminished by the results from GE and Wachovia, and while
Tesco was pretty good, the focus is now on the big U.S. banks
reporting this week," said Thierry Lacraz, strategist at Swiss
bank Pictet.
On Friday, U.S. conglomerate General Electric <GE.N> posted
a shock profit drop and on Monday, bank Wachovia reported poor
results. JPMorgan Chase <JPM.N> is due to report on Wednesday,
Merrill Lynch <MER.N> on Thursday and Citigroup <C.N> on Friday.
In Europe, auto stocks were among the worst decliners after
European sales showed a fall for the month as well as the
quarter. Peugeot <PEUP.PA> lost over 3 percent and Renault
<RENA.PA> was down 1.4 percent.
The biggest drag on the broader European market was Swiss
drugmaker Roche <ROG.VX>, down 3.5 percent after big-selling
drug Rituxan failed to show it was an effective treatment for a
type of multiple sclerosis and ahead of first-quarter sales due
Thursday.
(Additional reporting by Sitaraman Shankar in London, Blaise
Robinson in Paris and Thomas Atkins in Zurich; Editing by David
Holmes)
