By Eva Kuehnen
FRANKFURT, May 29 (Reuters) - European shares rose on
Thursday, lifted by buoyant mining and energy stocks, while
selected banking stocks remained weak and investors braced
themselves for U.S. economic growth data later on.
Among major movers, Infineon <IFXGn.DE> shed 9.4 percent
after the German chipmaker warned it expected a bigger operating
loss and flat sales at its communication chips unit this quarter
due to lower volumes than expected in some wireless platforms.
By 0912 GMT, the pan-European FTSEurofirst 300 index
<> was up 0.6 percent at 1,334.01 points, having risen
almost 1 percent in the previous session.
The index has fallen 0.8 percent so far this month, but has
recovered from a loss of up to 2 percent earlier this week.
"The negative exaggeration has been cleared and we now have
a friendly undercurrent," said Achim Matzke, European stock
indexes analyst at Commerzbank, in Frankfurt.
"It is, to a large degree, all about selection now," he
said, adding that while the tone of the market was firmer, there
was no evidence yet of a broader-based recovery.
Oil majors were the strongest gainers in Europe with BP
<BP.L> up 2.1 percent, Total <TOTF.PA> rising 2 percent and
Royal Dutch Shell <RDSa.L> gaining 1.9 percent as crude oil
futures <CLc1> hovered near $130 a barrel.
Mining stocks were also sought after, with Rio Tinto <RIO.L>
up 2.1 percent as the miner predicted seven years of
near-double-digit annual production growth as it argued its case
for rejecting a $178 billion takeover bid as too low.
BHP Billiton <BLT.L> gained 1.6 percent and Anglo American
<AAL.L> rose 1.7 percent.
On the downside, banking stocks remained weak with HBOS
<HBOS.L> falling 2.3 percent, Barclays <BARC.L> down 2.3 percent
and Royal Bank of Scotland <RBS.L> falling 1.3 percent.
A media report said RBS has extended Wednesday's deadline
for the auction of its insurance arm, which includes its Direct
Line and Churchill brands. RBS declined to comment.
Volkswagen <VOWG.DE> dropped 1.3 percent after Deutsche Bank
downgraded the carmaker to "sell" from "hold". The stock briefly
pared losses after Porsche <PSHG_p.DE> said it wanted to raise
its Volkswagen stake to over 50 percent this year.
GROWTH CONCERNS
Easing oil prices and upbeat U.S. data soothed investor
concern about the economic outlook on Wednesday, giving a boost
to markets in the United States and Asia.
"It seems that at the moment optimists prevail who expect
the negative impact on the real economy to be limited and that
the United States won't slide into a recession after all," said
Heino Ruland, market analyst at FrankfurtFinanz.
Market players will keep a close eye on the preliminary
reading of first-quarter U.S. real GDP and weekly jobless
claims, both due at 1230 GMT, for evidence of the strength of
the world's largest economy.
At 1830 GMT, after the European market close, U.S. Federal
Reserve Chairman Ben Bernanke makes a keynote speech via
videoconference at the Bank for International Settlements in
Basel.
(Editing by Louise Ireland)
