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Europe shares higher on BNP, BA results

"Unless we get figures to the contrary, we will see a bit more of a correction ... Share prices saw one-way traffic at the back end of last year and the start of this year."

Mark Priest, an equity trader at spread betting firm TradIndex

European shares were mostly higher on Friday as strong results from BNP Paribas and British Airways and an improved bid for steel maker Arcelor helped balance fears the cycle of rising US interest rates may not be over.

The German DAX 30 index added 0.1 percent to 5,672 and the French CAC 40 index rose 0.5 percent to 4,944, while the UK FTSE 100 index was down 0.3 percent at 5,657.

Concerns about rising rates and economic slowdown have hit stock markets around the world in the last two weeks.

Mark Priest, an equity trader at spread betting firm TradIndex, said he expects the recent stock market declines to continue, especially if further data points to US interest rate hikes continuing.

"Unless we get figures to the contrary, we will see a bit more of a correction," he noted. "Share prices saw one-way traffic at the back-end of last year and the start of this year."

French bank BNP Paribas climbed 3.5 percent after it said that its first-quarter net profit rose 17 percent, ahead of analyst forecasts, driven by strong growth from the bank's retail and investment banking divisions.

Among peers, Fortis, ING Group and Credit Agricole were all higher. Societe Generale climbed 3.4 percent after Deutsche Bank upgraded it to buy, citing strong first-quarter results.

Arcelor jumped 9 percent after Mittal Steel lifted its takeover offer by 34 percent, just a day after launching a formal bid for the company. Mittal tumbled 7 percent in Amsterdam.

Corus Group, the Anglo-Dutch steelmaker, rose 1.7 percent.

Deutsche Boerse climbed 3 percent after it outlined its proposal for a merger with pan-European peer Euronext. The merger would be done through a new Netherlands-based parent company to ensure that it's structured as a true merger, rather than a takeover. Shares in Euronext climbed 6 percent.

German software company SAP climbed 0.8 percent after the chief of the company's supervisory board told the Financial Times Deutschland that the firm would be open to being bought. But he added he only saw Microsoft, IBM and Google as possible buyers.

British Airways PLC added 9.1 percent after announcing that fourth-quarter net profit came to ?80 million (US$151 million) from just ?1 million a year earlier. BA also lifted its revenue guidance to growth of 5 percent to 6 percent from an earlier forecast of 4 percent to 5 percent.

"British Airways says market conditions are unchanged but the company is clearly experiencing robust trading, especially in premium cabins," said Mike Powell, an analyst at Dresdner Kleinwort Wasserstein. "We foresee another year of solid earnings progress despite higher fuel bills."

The UK's Centrica gave up 1.8 percent after the gas provider forecast group earnings for the year to be toward the lower end of market expectations.
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