(Repeats to new USN)
* FTSEurofirst 300 up 0.2 pct in choppy trade
* Banks under pressure; Bernanke's comments weigh
* Defensive drugmakers in demand; Tesco falls
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, Dec 8 (Reuters) - European shares drifted higher in
early trade on Tuesday, with drugmakers in demand as banks came
under pressure after subdued comments on prospects for the
economy from U.S. Federal Reserve Chairman Ben Bernanke.
Bernanke said on Monday the U.S. recovery remained fragile
and unemployment might remain high for some time, cooling
anticipation of an early interest rate rise. []
At 0948 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.2 percent at 1,022.60 points after
oscillating around its closing level on Monday, when the index
fell 0.5 percent. It is up 22 percent this year and has surged
57 percent since hitting a record low in early March.
Banks were among the top losers, with HSBC <HSBA.L>,
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Bank of
Ireland <BKIR.I> and Allied Irish Banks <ALBK.I> down 0.6
percent to 5.6 percent
"There is still nervousness in the market," said Bernard
McAlinden, investment strategist at NCB Stockbrokers, in Dublin.
"People have enough big-picture things to worry about."
Investors also kept a close eye on Dubai, with the emirate's
finance chief saying that six months would be too short to
restructure indebted state-controlled conglomerate Dubai World,
but adding that it has enough assets to meet its obligations.
Dubai World [] is discussing a new date with banks
for $3.5 billion in debt falling due on Dec. 14, but with no
deal yet announced, spooked investors sold Dubai shares down to
21-week lows. [] []
Across Europe, Britain's FTSE 100 index <>, Germany's
DAX <> and France's CAC 40 <> rose 0.1-0.2 percent.
DEFENSIVE SHARES IN DEMAND
Drugmakers, generally seen as defensive plays, were in
demand. AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L>, Merck
<MRCG.DE>, Novartis <NOVN.VX>, Novo Nordisk <NOVOb.CO>, Roche
Holding <ROG.VX>, Sanofi-Aventis <SASY.PA> and Shire <SHP.L>
rose 0.1 to 1.4 percent.
Miners also gained, tracking a rise in metals prices. Anglo
American <AAL.L>, Antofagasta <ANTO.L>, Rio Tinto <RIO.L> and
Eurasian Natural Resources <ENRC.L> rose 0.3 to 1.3 percent.
But Xstrata <XTA.L> fell 1.3 percent. It is taking a $1.9
billion charge for restructuring its nickel business after metal
prices fell, and is taking further charges of $545 million for
copper smelting operations in Canada and Chile.
Tesco <TSCO.L>, the world's third-biggest retailer, fell 1.1
percent after posting lower-than-expected quarterly sales. The
supermarket group said sales at UK stores open at least a year
rose 2.8 percent, excluding petrol and VAT sales tax, in the 13
weeks to Nov. 28. []
"There is a tinge of disappointment in this update, set
against the high expectations which Tesco attracts," said
Richard Hunter, head of UK equities at Hargreaves Lansdown
Stockbrokers.
"In all, despite the markdown of the shares in early trade,
the market view remains tentatively positive on the company."
Dutch mail company TNT <TNT.AS> was up 3.8 percent. Two
activist funds have built up stakes in the company in a bid to
shake up its structure after a new strategy announced by the
group last week failed to incorporate a broad overhaul, a Dutch
newspaper said. []
In economic news, Japan's government agreed on a 7.2
trillion yen ($81 billion) stimulus package, aiming to prevent
the economy from tipping back into recession as deflation
persists and a strong yen threatens exports. []
(editing by John Stonestreet)
