By Eva Kuehnen
FRANKFURT, Feb 12 (Reuters) - European shares inched higher
on Tuesday as gains in oils majors offset weaker financials
after Credit Suisse's <CSGN.VX> earnings and market talk of a
large writedown at Dutch group ING <ING.AS>.
Heavyweight oil shares BP <BP.L>, Shell <RDSa.L> and Total
<TOTF.PA> rose by 1.1 to 1.6 percent each as oil stayed above
$93 a barrel. The Dow Jones Stoxx oil and gas index <.SXEP> was
up 1.2 percent.
Rising commodity prices boosted mining shares with Rio Tinto
<RIO.L> and BHP Billiton <BLT.L> and Anglo American <AAL.L>
rising 1.1 percent.
ING was the top percentage loser in Europe, sliding 5.3
percent on market talk of large writedowns linked to U.S. real
estate. ING declined to comment on the talk, but a spokeswoman
said the firm "was perfectly aware of its obligation to report
any material deviations."
Credit Suisse fell 3.4 percent after the Swiss bank said it
trimmed its full-year writedowns linked to the subprime crisis
to 2.0 billion Swiss francs ($1.82 billion), but also reported a
49 percent fall in fourth-quarter net profit, slightly below
analysts' expectations.
By 0915 GMT, the pan-European FTSEurofirst 300 index
<> was up 0.3 percent at 1,294.86 points, after the index
fell almost 1 percent on Monday.
"I can't see any changes in the overall sentiment," said
Susanne Lahmann, equities strategist at Bremer Landesbank.
"I also think it's possible that the ZEW index will bring us
back down again," she added.
The German ZEW investor confidence index, due at 1000 GMT,
is expected to fall to -45.0 in February from -41.6 in January.
The current conditions index is forecast at 50.8, sharply down
from 56.6 the previous month.
Xstrata <XTA.L> fell 2.3 percent after the Financial Times
said that the Anglo-Swiss miner has rejected a cash-and-shares
takeover approach from Brazil's Vale <VALE5.SA> pitched at just
under 40 pounds a share, or 39 billion pounds ($76 billion).
Vale's shares rose 3.6 percent.
FINANCIALS WEIGH
Insurers and banking stocks were among the strongest
decliners in Europe and the DJ Stoxx insurance sector index
<.SXIP> dipped 2.5 percent while the banking index <.SX7P>
slipped 0.6 percent.
European credit derivative indexes hit fresh record wides,
giving up earlier tentative gains, on continued worries about
forced selling of structured credit products.
By 0819 GMT, the Markit iTraxx Europe index <ITRAC5EA=GFI>
was at 106.25 basis points, according to Markit, 3.75 basis
points wider versus late on Monday.
"Credit spreads are widening, especially in banks. We had a
lot of feedback from AIG, people are fearful of more to come,
leverage loan writedown risk in general is in focus, and
analysts are cutting forecasts for U.S. banks," one trader said.
"And now there's fear that analysts will look at the market
and start cutting forecasts at Credit Suisse's shining light,
the private bank," he added.
Credit Suisse's net new money in wealth management was far
better than expected compared with an average forecast in a
Reuters poll.
Sentiment in the sector was dragged down by looming losses
at American International Group <AIG.N>.
AIG shares plummeted to their worst loss since the 1987
stock market crash on Monday after the world's largest insurer's
auditors said the company failed to account properly for
derivatives related to risky debt known as collateralized debt
obligations.
Insurers in Europe such as Allianz <ALVG.DE> and Europe's
second biggest insurer AXA <AXAF.PA> fell 4 percent and Swiss Re
<RUKN.VX> dropped 3 percent.
Investors are also looking at Credit Suisse's results in
view of other European banks to report this week, such as
Germany's Commerzbank <CBKG.DE> and Switzerland's UBS <UBSN.VX>.
Among major movers, Norway's Renewable Energy Corporation
(REC) <REC.OL> rose 5.7 percent after the solar industry group
reported a bigger-than-expected rise in fourth-quarter core
profits.
(Additional reporting Sitaraman Shankar in London; Editing
by Erica Billingham)
