By Sitaraman Shankar
LONDON, April 23 (Reuters) - European shares rose early on
Wednesday, led by Belgian drugmaker UCB <UCB.BR>, which gained
on a key regulatory approval, while robust oil and metal prices
lifted commodity stocks and acquisition talk boosted telecoms.
At 0802 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.5 percent at 1,310.55 points.
UCB topped the leader board, soaring 26 percent after its
Cimzia drug for bowel disorder Crohn's disease won U.S.
regulatory approval about a year earlier than envisaged.
Miners and energy stocks were the top weighted gainers on
the index, as crude prices stayed around $118 a barrel and
copper ticked up.
Lonmin <LMI.L>, Antofagasta <ANTO.L> and Vedanta <VED.L> all
rose more than 1.2 percent, while BP <BP.L> rose 0.6 percent and
Total <TOTF.PA> gained 1.2 percent.
Telecoms group KPN <KPN.AS> rose 2.9 percent on a newspaper
report that Spanish rival Telefonica <TEF.MC> was planning a bid
for it. Telefonica declined to comment, apart from saying that
its priority was to cut debt and raise its dividend.
Chipmaker Infineon <IFXGn.DE> jumped 5.5 percent on market
talk of private equity interest. It declined to comment.
The company earlier said it expected third-quarter sales to
be flat or slightly lower this year.
"The key issue over the next week is whether analysts reset
expectations. As U.S. and UK GDP weakens, investors have still
not factored in a slowdown, and they may start doing this," said
Justin Urquhart Stewart, investment director at 7 Investment
Management.
"I hope companies give us weaker outlook statements, which
are more realistic. This is a good time to get bad news out, to
reset expectations," he said.
Britain's FTSE 100 <> rose 0.4 percent, while Germany's
DAX <> gained 0.5 percent and France's CAC <> rose
0.8 percent, led by a 3-percent gain in building material maker
St Gobain <SGOB.PA>.
The group stuck to its 2008 earnings growth targets despite
posting lower first quarter sales late on Tuesday.
RESULTS KEY
Later in the session, the focus shifts to results from
drugmaker GlaxoSmithKline <GSK.L>. For an analyst poll, double
click on [].
Urquhart Stewart said that the market would look for solid
earnings from the group, but added that it had still to give
investors confidence about its new drug pipeline.
Despite question marks over the efficiency of their research
programmes, pharmaceutical stocks have outdone many sectors this
year, benefiting from general investor risk aversion, but
Urquhart Stewart said other defensives were a good bet.
"Among defensives, the major gainers are likely to be the
discount grocery companies such as Tesco <TSCO.L>, which are
gaining from higher food prices," he said.
Stocks were also underpinned by the euro coming off after
ECB governing council member Christian Noyer indicated that
eurozone rates could move in either direction.
The FTSEurofirst has risen 3.7 percent so far this month,
putting it on line for its best month since September 2005, but
after a torrid first quarter where it lost 16 percent, driven by
massive bank writedowns stemming from credit market problems.
These market ructions have prompted calls for a revamp at
Swiss bank UBS <UBSN.VX>, and a record rights issue at Royal
Bank of Scotland. Both stocks stayed in focus ahead of
shareholder meetings later in the day.
RBS was down 2.9 percent and UBS down 0.3 percent.
U.S. stocks were expected to open higher based on index
futures. Overnight, search engine group Yahoo <YHOO.O> posted a
better-than-expected quarterly profit.
(Editing by Paul Bolding)
