The French government is leading more than 30 banks in a 7 billion-euro (US$8 billion) rescue that includes selling new shares and converting bonds into stock, diluting the value of existing investors' holdings.
KarstadtQuelle AG, Germany's largest retailer, climbed 8.2 percent to 22.39 euros. The stock surged 21 percent this week, the biggest gainer in the Stoxx 600, after the company narrowed its second-quarter loss by 79 percent to 27.8 million euros.
Deutsche Bank AG yesterday advised investors to buy the stock, increasing the share-price target to 25.30 euros from 15 euros previously and raising this year's profit estimate 30 percent to 1.34 euros per share.
Carrefour SA, the world's biggest retailer after Wal-Mart Stores Inc, rose for a second day, adding 1.5 percent to 41.10 euros after its larger rival said second-quarter earnings rose more than the company expected. Wal-Mart sales at US stores open at least a year rose 4.6 percent from a year earlier, higher than the company's 4 percent forecast.
"Banks' numbers were excellent as the companies showed a strong capability to control costs," said Sebastien Korcha, a fund manager at Meeschaert Asset Management in Paris.
Nokia, the world's largest maker of mobile phones, advanced 1.5 percent to 12.61 euros after boosting July cellular-phone sales by 11 percent in Finland. Demand in the country where 88 percent of the population owns a cell-phone was bolstered by new models with color screens and built-in cameras.
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