* FTSEurofirst 300 up 1.2 pct, highest close since June 12
* Financials advance on CIT news
* Mining shares rise as metal prices jump
By Brian Gorman
LONDON, July 20 (Reuters) - European shares rose for a sixth
straight session on Monday to a five-week closing high on
further evidence of recovery in the United States, and a rescue
package for lender CIT <CIT.N>.
The FTSEurofirst 300 <> index of top European shares
rose 1.2 percent to 881.19 points, its highest close since June
12. The index has gained 8.2 percent in the past six sessions
and is up 36.5 percent from the lifetime low it hit on March 9.
"The confirmation of recovery is coming from top down and
bottom up," said Georgina Taylor, equity strategist at Legal &
General Investment Management. "Companies are suggesting that
things are starting to improve. Economic data is stabilising."
An index gauging the U.S. economy's prospects increased for
a third straight month in June, suggesting the recession was
drawing to a close. The index of leading economic indicators,
which aims to forecast economic trends six to nine months ahead,
rose 0.7 percent in June following a revised 1.3 percent gain in
May, the New York-based Conference Board said. []
Banks were among the top gainers, with sentiment improving
after news that CIT Group signed off on a last-minute $3 billion
in rescue financing by a group of bondholders, and probably
escaped bankruptcy. CIT lends to nearly one million small and
mid-sized U.S. businesses. []
BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Credit
Suisse <CSGN.VX>, HSBC <HSBA.L>, Lloyds <LLOY.L> and UniCredit
<CRDI.MI> rose between 2.1 and 6.7 percent.
But Swedish banking group SEB <SEBa.ST> fell 4.4 percent
after posting a sharply weaker-than-expected second-quarter
operating profit, taking higher provisions and writing off the
last of its goodwill on its hard-hit Eastern European business.
[]
Across Europe, the FTSE 100 <>, Germany's DAX <>
and France's CAC 40 <> rose between 1 and 1.6 percent.
MELTDOWN THREAT EASES
"Sentiment and certain macroeconomic data have clearly
improved in the last few months, and the risk of a prolonged
global recession and threat of a meltdown in the financial
system has eased," said Simona Paravani, Global Investment
Strategist at HSBC Global Asset Management in a note.
"However, the outlook for growth remains anaemic, and will be
at a much lower rate than before".
Improved risk appetite globally saw the dollar weaken to a
six-week low against the euro.
Dollar-priced metals and crude oil were cheaper for holders
of other currencies, with more demand for commodities sending
copper <MCU3=LX> prices to their highest level this year.
Crude also rose, but was flat by late afternoon, at about
$63.60 a barrel.
But oil companies retained most of their gains, with BP
<BP.L>, ENI <ENI.MI> Total <TOTF.PA> and StatoilHydro <STL.OL>
up 1.4-1.7 percent.
Miners also gained. BHP Billiton <BLT.L>, Antofagasta
<ANTO.L>, Rio Tinto <RIO.L> rose 2.8-3.8 percent.
Better-than-expected corporate earnings results from major
U.S. companies including Goldman Sachs <GS.N>, IBM <IBM.N> and
Intel <INTC.O> have prompted investors to buy equities. The
market awaited more results this week from companies such as
Credit Suisse <CSGN.VX>
GlaxoSmithKline <GSK.L>, which reports results on Wednesday,
rose 2.6 percent. RBS reiterated its "buy" rating on the
company, pointing to "surprisingly positive results in the first
of two pivotal trials for an antibody with the potential to
treat a difficult, yet widespread, autoimmune disease".
Weekend press reports said the company was in talks with 30
countries about supplying remedies for swine flu. Among other
drugmakers, Novartis <NOVN.VX> and Sanofi-Aventis <SASY.PA> were
up 1.5 and 1.3 percent respectively.
On the downside, any deal to sell Porsche SE's <PSHG_p.DE>
sportscar business to Volkswagen <VOWG.DE> could be scuppered by
potential tax liabilities, a German newspaper reported.
[]
Porsche and Volkswagen declined to comment. The shares fell
6.1 and 5.4 percent respectively.
As European bourses were closing, the Dow Jones <>, S&P
500 <.SPX> and Nasdaq Composite <> were up between 0.4 and
0.5 percent.
(Additional reporting by Atul Prakash; Editing by Rupert
Winchester)
