By Eva Kuehnen
FRANKFURT, Jan 24 (Reuters) - European shares rebounded on
Thursday as strong results from Nokia <NOK1V.HE> and Allianz
<ALVG.DE> and a bond-insurance rescue package calmed investors,
surprised by Societe Generale's (SocGen)'s <SOGN.PA> fraud
disclosure.
The pan-European FTSEurofirst 300 index <> closed 5.4
percent higher at 1,330.42 points, after ending the previous
session at its lowest close in 1-1/2 years.
"Good news makes the market snap back like a rubber band,
especially in such an oversold situation," said Christian
Stocker, equity strategist at UniCredit Global Research.
The world's largest mobile phone manufacturer, Nokia, jumped
14.6 percent after reporting a 57 percent rise in earnings per
share in the fourth quarter, with booming demand in emerging
markets boosting its global market share to 40 percent.
The DJ Stoxx European technology sector index <.SX8P> gained
8.7 percent as the strongest sector in Europe, followed by the
DJ Stoxx insurance sector index <.SXIP>, which was up 7.7
percent.
Europe's largest insurer Allianz, rose 11.3 percent, as it
reached its full-year net profit goal of 8 billion euros ($11.72
billion), despite a 900-million-euro writedown on complex
financial instruments in its banking business during the fourth
quarter.
Takeover speculation also added to gains amid market talk of
Chinese bid interest for Britain's Prudential <PRU.L>, which
rose 4.6 percent. Axa <AXAF.PA> gained 10.4 percent.
U.S. government plans to boost the economy added to
investors' optimism after New York's insurance regulator pressed
major banks on Wednesday to put up billions of dollars to rescue
ailing bond insurers.
The chairman of the U.S. Senate Finance Committee said the
panel would meet next week to draft a U.S. economic stimulus
bill.
"It shows that they are willing to act. It's a first step
and it eases concern and helps our recovery," Stocker said. "But
I think more action is still needed," he said.
Stocker added that this was a good opportunity to buy back
into insurers as their valuations had fallen strongly recently
and now looked very attractive.
"EXCEPTIONAL" FRAUD
Societe Generale (SocGen) dropped 4.1 percent after France's
second-largest bank said it had been the victim of a massive and
"exceptional" fraud, resulting in losses of 4.9 billion euros,
which forced it to acquire emergency cash.
SocGen shares had the biggest negative pull on the European
benchmark index.
Moody's Investors Service cut SocGen's long-term debt and
deposit ratings by one notch to "Aa2," the third-highest
investment-grade rating, from "Aa1," and its bank financial
strength rating by one notch to "B-minus" from "B."
"The loss resulting from the fraud appears to be an isolated
event triggered by exceptional circumstances," UniCredit said in
a note.
Other European banking stocks gained regardless, with The
Royal Bank of Scotland <RBS.L> rising 9.2 percent, HSBC <HSBA.L>
up 3.4 percent, ING <ING.AS> climbing 9 percent and UBS
<UBSN.VX> adding 8.1 percent.
(Editing by Suzy Valentine)
