* FTSEurofirst 300 index rises 0.8 percent
* Spanish banks gain on Spain's plans for cajas
* Delhaize rises on results, peer Metro gains
By Joanne Frearson
LONDON, Jan 21 (Reuters) - European shares rose on Friday as
Spain's plans to part nationalise its debt-laden savings banks
boosted banking stocks, while forecast beating results from U.S.
bellwether General Electric also improved market sentiment.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.8 percent higher at 1,148.32 points recovering
after two-days of losses, though ended off the day's high as
some investors took profits ahead of the weekend.
"The biggest risk to the European economies is the macro
politics in the peripheries, short-term this has improved and
the equity markets are now playing catch up," Philip Isherwood,
head of equity strategy at Evolution Securities said.
A source familiar with the matter said the government would
force debt-laden regional savings banks to become conventional
banks, while Deputy Prime Minister Alfredo Perez Rubalcaba said
Spain would step up plans to improve the solvency and
credibility of its cajas. []
Spain's IBEX 35 <> index rose 1.8 percent, while
Spanish banks BBVA <BBVA.MC> and Banco Santander <SAN.MC> gained
3.4 percent and 3.8 percent respectively.
Outside Spain, other banks were also performing well, with
the STOXX Europe 600 Banks <.SX7P> up 1.1 percent.
Royal Bank of Scotland <RBS.L> soared 6.5 percent after an
industry source said Britain's Treasury are in talks over RBS's
possible early exit from the government asset protection scheme
that insures the bank's riskiest assets. []
Franco-Belgian financial group Dexia <DEXI.BR> jumped 3.9
percent after it said it was finalising a funding agreement with
the banking arm of France's La Poste. []
Market sentiment was also given a boost after General
Electric <GE.N>, which is considered a bellwether for corporate
America reported better-than-expected quarterly earnings.
[]
"Companies are beating expectations and fundamentally the
economic story is that we are going to see upgrades to
forecasts. I expect a continued positive picture for equities,"
Isherwood said.
DELHAIZE/METRO RISE
Retailers also performed well. Belgian supermarket group
Delhaize <DELB.BR> gained 2.6 percent after it reported
like-for-like sales in Belgium which doubled consensus
expectations late on Thursday. []
German retailer Metro <MEOG.DE> were 2.2 percent higher
boosted by the upbeat figures from Delhaize.
Technical analysts said the market had potential to advance
further.
"Notwithstanding the weakness in other European markets, the
Euro STOXX 50 has been quite resilient and is still within
striking distance of recent highs, which is consistent with the
bull trend it has been displaying for eight months," said Bill
McNamara, technical analyst at Charles Stanley.
"It appears to be rising within the confines of a bull
channel, which is indicating the possibility of a resistance
around current levels. Although on a broader view, critical
resistance is in the region of 3,000 and 3,030."
The Euro STOXX 50 <> was up 1.5 percent at 2,970.56
points. Across Europe, the FTSE 100 <> index was 0.5
percent higher, Germany's DAX <> was up 0.5 percent and
France's CAC 40 <> gained 1.3 percent.
The Peripheral Eurozone Countries Index <.TRXFLDPIPU> was
2.2 percent higher.
(Additional reporting by Atul Prakash; Editing by Jon
Loades-Carter)
