* FTSEurofirst 300 index closes 0.2 pct higher
* Drugmakers rise on broker upgrades
* Societe Generale profit warning hurts banks
By Brian Gorman
LONDON, Jan 13 (Reuters) - European shares closed higher on
Wednesday, with drugmakers boosted by broker upgrades, while
banks fell on a profit warning at Societe Generale <SOGN.PA> and
oil firms were hurt by weaker crude.
The pan-European FTSEurofirst 300 <> index rose 0.2
percent to close at 1,056.49 points, having gone in and out of
positive territory several times during the session.
The European benchmark is up more than 63 percent from its
lifetime low on March 9, as several major economies have emerged
from recession and corporate profitability has improved.
"We are going to see a very choppy market over the next week
or two, driven by corporate earnings," said Bob Parker, vice
chairman of asset management at Credit Suisse.
He noted that aluminium producer Alcoa <AA.N>, which kicked
off the U.S. quarterly earnings season on Monday, disappointed
investors.
"But we are going to get splendid results from JPMorgan
<JPM.N> (on Friday). And there is still a lot of cash sitting on
the sidelines," Parker said.
He said European fourth-quarter earnings would be up 25
percent on a year earlier, and "that will set a positive
backdrop for markets".
Most drugmakers rose. Credit Suisse upped its rating on
Roche <ROG.VX> and AstraZeneca <AZN.L> on valuation grounds to
"outperform" and "neutral", respectively.
Novartis <NOVN.VX>, AstraZeneca <AZN.L>, Roche <ROG.VX> and
Sanofi-Aventis <SASY.PA> rose between 0.6 and 1.2 percent.
Citigroup also helped to buoy the sector, upping UCB
<UCB.BR> "buy" from "hold". UCB rose 4.2 percent.
Drugs-to-chemicals company Bayer <BAYGn.DE> rose 1.8
percent. Among other risers in the strongly-performing chemicals
sector, BASF <BASF.DE> gained 0.9 percent after Goldman Sachs
raised its target price.
BANKING WEIGHS
The vast majority of sectors rose, but the heavyweight
banking sector helped to limit the index's gains.
Societe Generale, France's second-biggest bank by market
capitalisation, issued a profit warning after taking a new 1.4
billion euro ($2.03 billion) hit from risky assets
[]. The stock fell 2.9 percent.
BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Barclays
<BARC.L>, Credit Suisse <CSGN.VX>, Deutsche Bank <DBKGn.DE>,
HSBC <HSBA.L> and UBS <UBSN.VX> fell between 0.7 and 1.7
percent.
Across Europe, the FTSE 100 <> ended the day 0.5
percent lower. Germany's DAX <> rose 0.3 percent and
France's CAC 40 <> was flat.
Wall Street was higher around the time European bourses were
closing. The Dow Jones <>, S&P 500 <.SPX> and Nasdaq
Composite <> were up between 0.2 and 0.4 percent.
Kraft Foods <KFT.N> rose 0.6 percent after raising its
profit forecast late on Tuesday and saying it was
well-positioned to deliver "sustainable top-tier performance
with or without Cadbury". []
Kraft has offered 10.5 billion pounds ($17 billion) for the
British chocolatier. Cadbury <CBRY.L> rose 1.6 percent, despite
Italy's Ferrero announcing it would not bid. []
Hershey <HSY.N> is still undecided on whether it will make a
bid, a source told Reuters. []
Energy companies suffered as crude futures <CLc1> fell 2
percent after U.S. data showed inventories building. BP <BP.L>
and Total <TOTF.PA> both fell between 1.1 percent.
Royal Dutch Shell <RDSa.L> fell 1.8 percent on market talk
that the company was guiding analysts to reduce their forecasts
for the oil major's fourth-quarter earnings. []
On the economic front, the German economy contracted by a
record 5 percent last year due to a slump in its key export
sector, official data showed, but the government is poised to
raise its 2010 forecast. []
(Additional reporting by Harpreet Bhal; editing by Karen
Foster)
