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European stocks end higher

European stocks end higher

A rally in shares of Vodafone Group, climbing bank stocks, and seven-month lows for oil compensated Wednesday for another profit warning and a share price tumble at Airbus owner EADS, lifting broader European markets.
The U.K. FTSE 100 index closed up 0.5 percent at 5,966, paced by a rally in Vodafone after a well-received investor presentation, and strength from banks including Bradford & Bingley, Barclays and Lloyds TSB.
Those gains helped compensate for declines in the oil and metals sectors, with shares of the world's largest miner, BHP Billiton, sliding 4.8 percent on the US$20 drop in gold futures on Tuesday.
The German DAX Xetra 30 index increased 0.9 percent to 6,046. France's CAC-40 index added 0.7 percent to 5,256, advancing even as shares of EADS lost 4.2 percent.
The European aerospace and defense group and Airbus parent said late Tuesday that it will push back the A380 superjumbo jet's already delayed delivery schedule by up to another year, a move that tears into the company's projected earnings and raises the threat of canceled orders.
Shares of two major shareholders in EADS were mixed. Lagardere shares declined 1.8 percent, but DaimlerChrysler shares rose 1.2 percent, helped by a narrower-than-expected 2.3 percent monthly drop in U.S. auto sales and Tuesday's sharp decline in oil prices.
With crude futures trading around US$58 a barrel, travel-related stocks including British Airways and cruise operator Carnival advanced, while energy producers including Royal Dutch Shell were mostly lower.
Shares of BP turned around to finish up 0.3 percent after reaching their lowest level since June 2005 earlier in the day. BP said third-quarter production would dip slightly from a hurricane-impacted quarter last year, to 3.8 million barrels a day, and reported declining gas and power trading as well refining margins.
Vodafone shares gained 4.1 percent after Tuesday's investor presentation on Italy and Spain.
Barclays shares rose 1.9 percent on a report in the French newspaper La Tribune saying Citigroup has hired a law firm to study a bid for a European bank. The report identified Barclays as one of four targets. ABN Amro also helped Barclays, reiterating a buy rating and raising earnings targets on its aggressive growth strategy.
The gains also came after lender Halifax reported a 1 percent rise in monthly U.K. house prices, which was better than forecast. Shares of HBOS, the parent company of Halifax, rose 2.3 percent.
Other European banks also advanced, with UBS shares up 0.9 percent and Deutsche Bank up 2 percent.
A recovery in the technology sector helped French and German markets stay positive, with chipmaker Infineon Technologies up 3.1 percent following an upgrade to buy from neutral from Goldman Sachs. The broker said it believes Infineon's residual businesses are greatly undervalued.
Shares of truck maker MAN AG tumbled 7.5 percent after Volkswagen bought more than a 15 percent stake in the company, but said it wasn't interested in a full takeover. Volkswagen rose 1.3 percent.
French catering company Sodexho rose 1.3 percent after it said that its fiscal-year organic revenue climbed 6.4 percent and fiscal 2006 operating profit should meet or slightly exceed a 6 percent growth target.
Shares of Tate & Lyle rose 6.1 percent after Merrill Lynch upgraded it to buy from neutral, citing capacity expansion at artificial sweetener Splenda and expected U.S. pricing power.
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Sarah Turner is a correspondent for Dow Jones Newswires


Updated : 2021-02-28 09:23 GMT+08:00