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European shares rise; banks gain

Jul 28 2010 10:39

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London - European shares were higher in early trade on Wednesday, extending a rally into a seventh session, with banks gaining as several companies reported forecast-beating earnings.

At 07:04 GMT, the FTSEurofirst 300 index of top European shares was up 0.5% at 1 059.11 points, having risen 0.5% in the previous session to its highest close since June 21.

Banks were among the major gainers. Spain's second-largest bank, BBVA, rose 2% after beating analyst forecasts with a 9.7% drop in net profit as bad loans fell and overseas gains partially offset a sluggish domestic business.

Other banks to rise included BNP Paribas, Barclays and Societe Generale, up between 1.1% and 2.1%.

Banks were extending gains from Tuesday, when they were boosted by strong earnings from UBS, and the new Basel III capital rules proving less sringent than feared. They had also gained on Monday after the vast majority of banks passed stress tests.

"Earnings are coming through better than expected," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin. "Banks are better, with Basel, and the stress tests, having underperformed for some time."

  - Reuters

 
 
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