* FTSEurofirst 300 adds 0.3 percent
* Oil heavyweights rise as crude rallies to $143
* Banks in focus ahead of earnings
By Patrizia Kokot
LONDON, July 11 (Reuters) - European shares advanced
cautiously on Friday, largely driven by UK-listed mining and oil
stocks, while banks were mixed.
By 0848 GMT, the FTSEurofirst 300 index <> of top
European shares rose 0.3 percent to 1,160.69 points, following a
2.1 percent sell-off on Thursday.
"The advance is entirely driven by oil, and mining stocks
are up because of metal prices," David Buik, a strategist at BGC
Partners said, adding there was little positive newsflow to
support sentiment otherwise.
Oil and gas heavyweights were also in demand as crude
rallied past $143 a barrel on geopolitical worries and concerns
over supply. BP <BP.L> added 2 percent, Total <TOTF.PA> advanced
1.5 percent and Royal Dutch Shell <RDSa.L> rose 1 percent.
The DJStoxx European Basic Resources index <.SXPP> the
biggest gainer among the 18 sectoral mining indices, rising 1.2
percent as Xstrata <XTA.L> added 1.7 percent, Anglo American
<AAL.L> rose 1.3 percent and Vedanta <VED.L> gained 1 percent.
Casino <CASP.PA> rose 2.3 percent after the French food
retailer confirmed its outlook for the full year and posted a
14.6 percent rise in second-quarter sales.
The retail sector was hit on Thursday after retailer
Carrefour <CARR.PA> disappointed with a sharper than expected
drop in its French hypermarket revenues.
Cutch supermarket group Ahold <AHLN.AS> rose 0.8 percent and
Carrefour gained 0.6 percent.
Air Berlin <AB1.DE> soared as much as 12 percent after it
withdrew its plans to merge with Thomas Cook's <TCG.L> charter
service Condor.
Around Europe, the FTSE <> was up 0.6 percent, the DAX
<> was down 0.2 percent and the CAC <> was up 0.12
percent.
Zurich Financial <ZURN.VX> rose 8 percent after pulling out
of the bidding for the insurance unit of Royal Bank of Scotland
<RBS.L>. RBS shares edged down 0.4 percent.
BANKS EASE, U.S. EARNINGS IN FOCUS
Banks grabbed the early spotlight following reports of a
potential U.S. government bailout of home financing groups
Fannie Mae <FNM.N> and Freddie Mac <FRE.N>.
While large banks held onto their gains, smaller peers
Natixis <CNAT.PA>, Dexia <DEXI.BR> and Credit Agricole <CAGR.PA>
fell between 0.4-2.5 percent as concerns lingered over financial
losses in the sector ahead of a slew of U.S. earnings next week.
The DJStoxx European banks index was flat with blue chips
Credit Suisse <CSGN.VX> and UBS <UBSN.VX> adding 1-2 percent,
while HSBC <HSBA.L> rose 1.3 percent.
Earnings from General Electric <GE.N> are expected to grab
the limelight later with second-quarter earnings before the U.S.
stock market open. The economic calendar includes consumer
sentiment data for early July at 1355 GMT.
"General Electric will be like taking an Aspirin. If the
results are good, the market will be relieved but I don't expect
it to trigger a rally," Buik said.
Automotive stocks were out of favour following a bearish
note from Merrill Lynch.
Supplier Continental AG <CONG.DE> fell 2 percent after it
was downgraded to "neutral", while French rival Michelin
<MICP.PA> fell 2.2 percent after Exane BNP Paribas cut its
rating on the stock.
The high price of crude hit airline stocks again and
Lufthansa <LHAG.DE> fell 2.7 percent, Air France-KLM <AIRF.PA>
lost 3.7 percent and British Airways <BAY.L> shed 3.8 percent.
Pharmaceutical stocks fell after recent gains, with Novartis
<NOVN.VX> down 1.2 percent, Sanofi-Aventis <SASY.PA> down 1.1
percent and Roche <ROG.VX> down 0.8 percent.
(Editing by Sue Thomas)
