Sun, Jun 03, 2007 - Page 10 News List

European stocks close higher on stronger US data


European shares ended higher on Friday as investors welcomed slightly stronger-than-expected US jobs data, strength in the telecom sector and gains from French automaker Renault.

The UK FTSE 100 index closed up 0.8 percent at 6,676.70 and the German DAX Xetra 30 index rose 1.3 percent to 7,987.85, also helped by gains of 2.3 percent from software company SAP.

The French CAC-40 index increased 1.1 percent to 6,168.15, with shares in Renault up 7.1 percent. The company just held a road show with Japan's Nissan Motors, in which Renault holds a 44 percent stake.

"The road show highlights bullish margin guidance and the importance of successful execution in the US," noted analysts at Deutsche Bank.

US stocks opened higher, bolstered by an enthusiastic response to data that showed inflation fell back to the Fed's comfort zone as more jobs were created last month than projected.

Utility shares performed well for the second day, with EDF shares up 3.6 percent in France. Germany's E.On rose 1.5 percent, adding to gains a day earlier when it detailed well-received capital return plans. Spain's Iberdrola added another 5 percent, extending gains after Belgian financier Albert Frere disclosed he bought a 5 percent stake.

Major telecom companies gained ground, with Vodafone Group shares up 3.1 percent, Deutsche Telekom shares 4.1 percent higher and France Telecom up 2.6 percent as bid speculation hit the sector once more.

"The rumor is that AT&T and Telefonica are looking to have a pop at Deutsche Telekom's T-Mobile unit after they failed to buy Telecom Italia," David Buik at Cantor Index said.

However, he also cautioned against taking this speculation too seriously.

"It's Friday, it's been a tough week, the market's bored," he said.

In the technology sector, German semiconductor maker Infineon Technologies rose 2.2 percent, extending gains made on Thursday when Goldman Sachs added the company to its conviction buy list.

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