By Sitaraman Shankar
LONDON, March 11 (Reuters) - European shares rose in
volatile early trade on Tuesday, driven by gains in oil shares
and banks, with Vodafone <VOD.L> lifted by positive brokerage
comment from Goldman Sachs.
The gains more than offset weakness in technology stocks on
pricing concerns and miners hurt by persistent recession fears.
At 0945 GMT the FTSEurofirst 300 <> index of top
European shares was up 0.9 percent at 1,265.75 points, having
fallen 0.1 percent earlier.
Goldman Sachs added Vodafone to its "conviction buy" list,
lifting the stock 3 percent and making it the top weighted
gainer on the FTSEurofirst index.
Among banks, HSBC <HSBA.L> gained 2.4 percent, Royal Bank of
Scotland <RBS.L> 2.4 percent and ING <ING.AS> 2.2 percent.
But European aerospace group EADS <EAD.PA> fell 3.4 percent
after it posted a worse-than-expected 2007 net loss, while Nokia
<NOK1V.HE> and other tech stocks slipped after Texas Instruments
<TXN.N> cut its first-quarter forecasts citing a weak market.
Nokia fell 5 percent, Infineon <IFXGn.DE> lost 0.8 percent
and STMicroelectronics <STM.PA> slipped 1.3 percent.
The FTSEurofirst 300 index has fallen 16 percent so far this
year, led by financials which have tumbled on fears of
writedowns linked to credit market losses stemming from a
meltdown in U.S. subprime mortgages.
Strategists said that the macroeconomic picture would
dominate, with the U.S. Federal Reserve widely expected to cut
interest rates again next Tuesday, and then the focus would
shift to updates from major U.S. investment banks.
"The Fed will probably cut by 50 basis points, but people
will be interested in hearing their comments on the crisis in
the banking sector," said Thierry Lacraz, strategist at Swiss
bank Pictet.
"The main fear in the market still surrounds the real
situation around bank balance sheets, and the mood is deeply
dubious about what banks will report for the first quarter."
Goldman Sachs <GS.N>, Lehman Brothers <LEH.N>, Morgan
Stanley <MS.N> and Bear Stearns <BSC.N> are all due to report
over the next ten days.
OILS, VODAFONE RALLY
Heavyweight oil stocks gained as crude stayed close to its
record of just over $108 a barrel. BP <BP.L> gained 2 percent,
while Total <TOTF.PA> and Shell <RDSa.L> gained more than 1
percent.
Index heavyweight Vodafone <VOD.L> rose 2.7 percent, making
the stock the top index points contributor on the pan-European
benchmark.
"We are adding Vodafone to the conviction buy list following
a period of stock price weakness. We expect Vodafone to continue
to benefit from growth in wireless data without an offsetting
risk of exposure to incumbent wireless assets," Goldman analysts
said in a note.
Other gainers included Cadbury Schweppes <CBRY.L>, which
rose 4.8 percent after the confectionery group set May 7 as the
date to demerge its North American soft drinks business after
market talk the group might have to delay the spin-off.
Belgian-Dutch financial group Fortis <FOR.BR> rose 2.5
percent after Web site El Confidential said Santander <SAN.MC>
and several sovereign wealth funds were among candidates who may
inject up to 2 billion euros in Fortis.
Santander and Fortis declined comment.
Around Europe, Britain's FTSE 100 <> was up 1.1
percent, Germany's DAX <> was up 0.6 percent and France's
CAC <> was 1.1 percent higher.
(Reporting by Sitaraman Shankar; Editing by Erica Billingham)
