By Sitaraman Shankar
LONDON, Jan 25 (Reuters) - Banks, technology and commodity stocks got
European stock markets off to a punchy start on Friday, as a speedy agreement on
a U.S. economic stimulus package helped lift shares worldwide.
At 0924 GMT, the FTSEurofirst 300 <> index of top European shares was
up 1.1 percent at 1,345.15 points, adding to a 5.4-percent leap on Thursday, and
tracking sharp gains in Asia.
Banks and oil shares were the top weighted sectors. Standard Chartered
<STAN.L> rose 2.4 percent and Commerzbank <CBKG.DE> 2.3 percent, while BP <BP.L>
rose 1.7 percent as the oil price <CLc1> breached $90 a barrel.
A 2-percent rise in copper futures <MCU3=LX> lifted stock in miners, with
Kazakhmys <KAZ.L>, Vedanta <VED.L> and Antofagasta <ANTO.L> up between 3 and 6
percent.
French bank Societe Generale <SOGN.PA> rose 2.5 percent a day after stunning
markets by disclosing a trader fraud that lost it 4.9 billion euros.
Shares in brewer Heineken <HEIN.AS> rose 1.7 percent after it and partner
Carlsberg <CARLb.CO> agreed a joint cash bid for Scottish & Newcastle <SCTN.L>,
which was up 2 percent. Carlsberg was up 0.2 percent.
Global stocks rose after the U.S. Congress and the White House agreed the
outlines of a stimulus package that would give 117 million U.S. families a tax
rebate. The agreement came less that a week after President George Bush said a
proposal was in the works.
Analysts said there were plenty of positives emerging from the United States
but expected share volatility in the short term.
"We expect sharp gains and losses in the next few days and weeks," said
Heinz-Gerd Sonnenschein, strategist at Postbank in Germany.
"The U.S. has done many things to stabilise the market such as the Fed rate
cut, the stimulus package and help for monoline insurers, but all the bad news
is not yet out there."
Britain's FTSE <> was up 1.1 percent, Germany's DAX <> up 2.2
percent and France's CAC <> up 1.3 percent.
RECOVERY AFTER TOUGH START
European shares have lost 12 percent so far this year, putting January on
track to be the worst month for the FTSEurofirst 300 since September 2002.
Investors have been worried by the prospect of a recession in the United
States, the world's biggest economy, and problems for bond insurers. which
guarantee more than $2 trillion of securities.
"With an interim loss of over 20 percent from its 2007 high, the European
equity market has probably extensively priced in at least a mild recession in
the USA," said Gerhard Schwarz, head of Global Equity Strategy at UniCredit in
Munich, Germany.
"The sell-off of the last few days has brought equity indices back to very
favourable valuations ... initially this will improve the chances of the equity
markets stabilising."
The FTSEurofirst 300 gained 1.6 percent last year after a 16 percent gain in
2006, and a bull run that began in 2003 has floundered badly in recent months.
Sonnenschein said he expected a shaky first half, with a recovery in the
second half.
"There are plenty of bears out there but we expect the DAX to end the year
at 9,000 and don't expect a recession in the United States, though there will be
plenty of data that brings the topic into discussion."
The DAX was trading at 6,944 points on Friday.
Among other big movers, handset maker Nokia <NOK1V.HE>, which rose 14
percent on Thursday after compelling quarterly results, added a further 4
percent.
Top beauty group L'Oreal <OREP.PA> gained nearly 5 percent after it posted
strong full-year sales late on Thursday and said it was confident for 2008.
(Editing by Paul Bolding)
