* FTSEurofirst 300 index ends 0.6 percent higher
* Retailers jump after positive results
* Drugmakers, automobiles shares advance
By Atul Prakash
LONDON, March 12 (Reuters) - European shares ended higher
for a third straight session on Thursday, with retailers jumping
on positive results by supermarket groups Morrison <MRW.L> and
Delhaize <DELB.BR>, while drugmakers gained on news of a
takeover in the sector.
The FTSEurofirst 300 <> index of top European shares
closed 0.6 percent higher at 696.89 points after falling to a
low of 676.03 points. But the benchmark is still down 16 percent
this year after plunging 45 percent in 2008.
The broader STOXX 600 <> was up 0.7 percent.
Carrefour <CARR.PA>, the world's No.2 retailer, rose 5.7
percent after announcing plans to cut prices and costs to fight
the economic downturn, taking its cue from rival grocers
Morrison and Delhaize who both beat profit forecasts.
The DJ Stoxx European retail index <.SXRP> ended 1.8 percent
higher, helped by a 4 percent rise in Morrison, a 10.7 percent
jump in Delhaize shares and a 2 percent rise in Tesco <TSCO.L>.
"This is a sunny period rather than the beginning of summer,
but it at least is a reminder that the market doesn't have to
keep going down on bad news," Andrew Bell, head of research at
Rensburg Sheppards.
"There are people out there who are looking to buy cheap
assets ... even if they are not yet in the majority," he added.
Pharma and biotech stocks were among top gainers, helped by
news that Roche Holding AG <ROG.VX> has struck a deal with
Genentech Inc <DNA.N> to buy all outstanding shares for $46.8
billion, or $95 each, ending a long pursuit of the U.S. biotech
group and its lucrative cancer drugs.
Roche was up 1.1 percent, Basilea Pharma <BSLN.S> gained 5.9
percent, Novartis <NOVN.VX> rose 4.3 percent and Shire <SHP.L>
increased 4.1 percent.
"There are signs of emerging optimism in stock markets
today. Confidence has been largely absent so far in 2009, with
every attempted rally squashed before it really has chance to
get going," said David Evans, analyst at BetOnMarkets.com.
"There is a growing sense that this time it is different,
and this belief will only grow if markets can survive the next
week or so without dropping too far below this morning's low
points," he added.
CAUTIOUS APPROACH
But investors remained cautious as a slew of European and
U.S. economic data pointed to declines in demand, production and
employment, while World Bank President Robert Zoellick forecast
the world economy will shrink 1-2 percent this year.
U.S. jobless claims rose to a worse-than-expected 654,000 in
the week to March 7, U.S. retail sales slipped 0.1 percent in
February, and the European Central Bank predicted global and
euro zone demand would likely be very weak in 2009.
And German industrial output fell by a record 7.5 percent in
January as foreign demand wilted, compounding the risk of the
trade-reliant economy seeing a new record contraction in the
first quarter.
"The massive contraction in industrial activity across the
euro zone in recent months is clearly hitting manufacturers'
pricing power ever harder," said Howard Archer, economist at
consultancy IHS Global Insight.
Automakers were generally higher, tracking gains in the
broader market. Daimler AG <DAIGn.DE>, BMW <BMWG.DE>, Porsche
<PSHG_p.DE>, Volkswagen <VOWG.DE>, Peugeot <PEUP.PA>, Renault
<RENA.PA> and Fiat <FIA.MI> were up 0.8-3.1 percent.
But the misery of the sector was far from over, with
Volkswagen warning of worse ahead and BMW <BMWG.DE>, the world's
largest premium carmaker, posting quarterly earnings sharply
under estimates.
Italian power utility Enel <ENEI.MI> closed 0.3 percent
higher. The company said it will launch a rights issue of up to
8 billion euros and pare back its dividend policy and capital
spending plans.
Swatch Group <UHR.VX>, the world's largest watchmaker
slipped 4.4 percent after it saw its profits slumping in 2008.
Across Europe, the FTSE 100 <>, Germany's DAX <>
and France's CAC 40 <> were up 0.5-1.1 percent.
