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European stocks end higher

European stocks end higher

European shares ended higher Thursday on hopes that companies may be purchased, a rebound in commodity prices and interest-rate decisions that met market expectations.
The U.K. FTSE 100 index rose 0.6 percent to 6,004, the German DAX Xetra 30 index increased 0.5 percent to 6,075 and the French CAC-40 index advanced 0.6 percent to 5,288.
The gains came as the Bank of England left interest rates on hold at 4.25 percent and the European Central Bank lifted rates to 3.25 percent from 3 percent, both as expected. ECB President Jean-Claude Trichet hinted at a further rate hike before the end of the year.
Continental indexes gained amid relief that future rate hikes would probably proceed as expected and keep growth on track, building on earlier optimism that U.S. economic growth will continue at a pace that will sustain job creation and corporate profits.
U.S. shares got off to a subdued start after hitting record highs in the previous two sessions.
Companies sensitive to movements in commodity prices shrugged off recent weakness to gain ground as crude oil futures rose back over US$60 a barrel and as metals prices also strengthened.
Gas explorer BG Group shares rose 3.4 percent and shares of Spain's Repsol rose 2 percent.
Shares of miner Rio Tinto rose 3.6 percent, while shares of BHP Billiton rose 4.1 percent.
Corus Group shares surged 16 percent amid hopes that it will enter into a deal with India's Tata Steel, and Banca Popolare di Milano shares jumped 6 percent on hopes that it may be the next Italian bank to be snapped up following failed deal talks with Banca Popolare Italiana Scarl.
Aer Lingus Group gained 15 percent after Ryanair Holdings said it has acquired over 16 percent of the carrier and offered to buy the rest in a deal that values Aer Lingus at euro1.48 billion (US$1.89 billion). Aer Lingus management rejected the offer. Shares in Ryanair slipped 1 percent.
British Airways shares lost 1.8 percent after Citigroup downgraded the carrier to hold from buy, citing lighter-than-expected September traffic and the company's reduced fiscal 2007 revenue guidance.
Shares in French automaker Renault gained 0.9 percent in Paris after three-way alliance talks with Nissan Motors of Japan and General Motors Corp. of the U.S. ended without success.
"Even if the deal would have created synergies, the complexity of linking up with a massive company not keen on doing a deal was justifiably concerning, as was the risk of disorganization and bad timing," said analysts at Societe Generale.
They noted that the GM talks provided evidence that Renault is actively seeking ways to boost sales and margins over the long term. "Talks with Ford would be seen as more reasonable," they added.
Shares of Remy Cointreau gained 3.9 percent after J.P. Morgan upgraded the maker of Remy Martin cognac and Piper-Heidsieck champagne to neutral from underweight, citing its successful restructuring into a group focused on premium spirits with significant market share in the U.S. and China.
Outdoor advertising company JC Decaux gained 3 percent after Morgan Stanley upgraded it to overweight from equal-weight, saying the current price doesn't reflect the long-term growth prospects of the company.
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Sarah Turner is a correspondent for Dow Jones Newswires


Updated : 2021-02-27 07:14 GMT+08:00