By Ana Nicolaci da Costa
LONDON, Feb 21 (Reuters) - European shares rose on Thursday,
led by banks and as results from the likes of Nestle <NESN.VX>
and Reed Elsevier <REL.L> underpinned the market, but shares
pared gains on fresh signs of a struggling U.S. economy.
Nestle was the biggest weighted gainer in the European
market, rising by 3.5 percent after the world's largest food
company defied record prices for ingredients such as milk and
cocoa and posted a 15.8 percent rise in net profits for 2007.
The FTSEurofirst 300 index <> closed up 0.7 percent at
1,330.07, off the day's high as a U.S. regional business
conditions index fell to a 7-year low reinforcing fears of a
recession.
But banks were the best gainers on the index, heartened by
Wednesday's Federal Reserve minutes suggesting the U.S. central
bank could cut rates further and the fact that results from the
scandal-ridden Societe Generale <SOGN.PA> did not contain any
new nasty surprises.
BNP Paribas <BNPP.PA>, Royal Bank of Scotland <RBS.L> and
ING <ING.AS> were up between 3 and 4 percent.
But Societe Generale <SOGN.PA> fell 2.3 percent as it
confirmed a record fourth-quarter loss of 3.35 billion euros
after absorbing a huge rogue trading scandal that has made it a
potential takeover target.
"The problem today of course is that as yesterday the
economic data flow in the U.S. is pretty poor. You are
effectively looking at another set of data which is pointing
towards a clear recession risk," said Philip Isherwood,
strategist at Dresdner Kleinwort.
Data showed a manufacturing slowdown in the U.S.
mid-Atlantic region this month reached its deepest in seven
years, while an index of future economic activity fell for a
fourth month.
Anglo-Dutch publisher Reed Elsevier announced the
acquisition of U.S. risk management business ChoicePoint Inc
<CPS.N> for $4.1 billion, including some debt, and said it would
intensify its cost-saving drive and sell an
advertising-dependent information business. The stock rallied
7.5 percent.
UPBEAT MINERS
Miners were also among top gainers benefiting from higher
metal prices and consolidation news in the sector.
Brazilian miner Vale <VALE5.SA> <RIO.N> has raised its offer
price informally in takeover talks with Swiss rival Xstrata
<XTA.L>, sources with direct knowledge of the negotiations said
on Thursday.
Anglo American <AAL.L>, Xstrata <XTA.L> and Kazakhmys
<KAZ.L> rose between 2.2 and 3 percent.
The biggest losers, however, were utility companies.
British energy firm Centrica <CNA.L> reported a 40 percent
rise in 2007 profit but it said margins were now tightening
again, prompting a 3.9 percent fall on the stock.
Elsewhere in the sector, British Energy <BGY.L> fell 2.6
percent and Germany's E.ON <EONG.DE>, which is also a big energy
supplier in Britain, eased 1.4 percent -- making it the biggest
weighted loser of Germany's DAX <> index.
Germany's stock market ended little changed on the day,
underperforming Britain's FTSE 100 <>, up 0.7 percent, and
France's CAC 40 <>, nearly 1 percent higher.
(Editing by David Cowell)
