By Blaise Robinson
PARIS, April 16 (Reuters) - European stocks rose early on
Wednesday, extending a recovery from the previous session as
Intel's <INTC.O> outlook eased worries over corporate earnings
and energy stocks tracked buoyant crude prices.
LVMH <LVMH.PA>, the world's biggest luxury goods group,
surged 4.9 percent after it reported a 12 percent rise in
comparable first-quarter sales and said it expected higher 2008
earnings.
At 0849 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1 percent at 1,294.42 points.
Technology shares were among the biggest gainers, with Nokia
<NOK1V.HE> up 2.9 percent and Infineon <IFXGn.DE> up 6.8
percent.
After the bell on Tuesday, Intel Corp <INTC.O> posted
revenue just ahead of Wall Street's expectations and stuck to
its full-year profit margin target, driving its shares up 7.4
percent in extended trading.
The sector also got a boost from strong earnings reported by
LG Electronics <066570.KS>.
TeliaSonera <TLSN.ST> rose 5.4 percent after Le Figaro
newspaper reported that France Telecom <FTE.PA> was studying a
possible takeover of the group through a share swap. France
Telecom dropped 3.5 percent.
Both TeliaSonera and France Telecom declined to comment.
"The bulk of the bad news is already priced in now in equity
markets, so we might get a rebound in the short term, although
we think that the real low will come around the end of the
second quarter," said Jean-Luc Buchalet, CEO of Pythagore
Investissement in Paris.
The FTSEurofirst 300 is still down 14 percent so far this
year, hit by worries over the prospect of a U.S. recession as
well as the impact of the global credit crisis on banks'
results.
Germany's DAX index <> was up 1.1 percent, the UK's
FTSE 100 index <> up 0.8 percent and France's CAC 40
<> up 1 percent.
Energy stocks tracked buoyant crude prices. BP <BP.L> was up
0.5 percent, Royal Dutch Shell <RDSa.L> up 0.6 percent and Total
<TOTF.PA> up 1.6 percent.
BANKS SOLID
Financial shares have been hit by a collapse in the U.S.
subprime mortgage market that forced a number of banks to unveil
massive asset writedowns and emergency capital increases.
"For the banks, a lot of people are starting to say that the
worst is already priced in. It's a fact that the impact from the
U.S. housing slump might be priced in at this point, but now the
focus is shifting on the banks' organic growth. Cyclical sectors
such as investment banking and trading operations will suffer,"
Buchalet said.
But financial stocks rose in Europe following gains on Wall
Street on Tuesday after a number of banks such as U.S. Bancorp
<USB.N> and Regions Financial Corp <RF.N> expressed confidence
they could weather credit losses from the housing slump.
British banking shares also got a boost from signs the Bank
of England was close to finalising the terms for mortgage
intervention.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Credit
Suisse and Societe Generale <SOGN.PA> gained 2.4 to 3.8 percent.
Investors will keep an eye on quarterly results from Wall
Street firm JPMorgan Chase & Co <JPM.N> on Wednesday, followed
by Merrill Lynch & Co <MER.N> on Thursday and Citigroup Inc
<C.N> on Friday, that could shed light on the ongoing impact of
the global credit crisis.
The Wall Street Journal reported Merrill Lynch would
announce another $6 to $8 billion in asset writedowns in its
quarterly results.
L'Oreal <OREP.PA> was among major losers, tumbling 6
percent. The beauty products maker posted first-quarter
like-for-like sales below expectations late on Tuesday, blaming
exceptionally tough trading in the United States.
Elan Corp <ELN.I> jumped 8 percent after the Irish drug
maker and U.S. partner Biogen Idec <BIIB.O> said they were
comfortably on track to meet their goal of having 100,000
patients on multiple sclerosis drug Tysabri by the end of 2010.
On the macro front, investors will focus on U.S. consumer
inflation and housing starts data due at 1230 GMT, for insight
into the health of the world's biggest economy.
(Editing by Paul Bolding)
