RTRS: European shares higher at midday on banks, oils
By Tyler Sitte
FRANKFURT, Nov 14 (Reuters) - European shares were higher in midday trade on Friday, led by oil and bank stocks, while Continental (CONG.DE: Quote, Profile, Research, Stock Buzz) rocketed higher as a takeover by Schaeffler looked more certain.
At 1253 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 2.4 percent at 872.96 points. But the benchmark is down about 5 percent this week and has lost more than 40 percent so far this year, hit by worries that the banking crisis will result in a deep global recession.
Continental jumped 29.5 percent -- having gained more than 50 percent earlier -- after ball-bearings maker Schaeffler said it plans to file for European Commission approval on a previously announced takeover of just under 50 percent of the German tyre and auto parts specialist.
Analysts said the announcement was helping shore up confidence in the company, but speculation also circulated of a possible short-squeeze driving shares up. Rumours that Porsche (PSHG_p.DE: Quote, Profile, Research, Stock Buzz) might be considering taking over Conti along with Schaeffler were denied by the automaker.
Europe shares gained after the Dow .DJI, S&P 500 .SPX and Nasdaq Composite .IXIC all rose between 6.5 and 6.9 percent on Thursday. But U.S. futures indicated mild downward corrections of between 0.5 and 0.8 percent on Friday.
Analysts and traders pointed to the rebound in the United States setting off a round of bargain hunting on this side of the Atlantic.
"A lot of bad news is priced into stocks and in many cases too much bad news is priced in. Investors who have a decent time horizon can use the current situation to pick up some stocks at very reasonable prices," said Henk Potts, equity analyst at Barclays Wealth in London.
Analysts, however, remain cautious about the medium term.
"European stocks fell 7.6 percent over the previous three days, led by basic resources that reacted badly to the deteriorating outlook for world economic growth as the OECD further downgraded its forecasts for next year," Arthur van Slooten, a strategist with Societe Generale, said in a note.
"Potentially worse is (U.S. Treasury Secretary Henry) Paulson's dramatic shift in policy, halting TARP in favour of an expanded recapitalisation programme and support for markets that securitise consumer credit as of January next year. That is a considerable period of uncertainty for the markets," he added.
OILS SHARES STRONG
Oils saw some of the highest gains. Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), ENI (ENI.MI: Quote, Profile, Research, Stock Buzz), BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), Statoil (STL.OL: Quote, Profile, Research, Stock Buzz), and BG (BG.L: Quote, Profile, Research, Stock Buzz) rose between 4.5 and 7.5 percent.
Among banks, Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz), France's biggest retail bank, rose 4.5 percent after its third-quarter net profit, reported late on Thursday, fell less than forecast.
Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz), Deutsche Postbank (DPBGn.DE: Quote, Profile, Research, Stock Buzz), Erste Group (ERST.VI: Quote, Profile, Research, Stock Buzz) and Commerzbank (CBKG.DE: Quote, Profile, Research, Stock Buzz) gained between 3.4 and 5.3 percent.
Dexia (DEXI.PA: Quote, Profile, Research, Stock Buzz), however, fell 13.3 percent after posting a quarterly loss of 1.544 billion euros. It said it had agreed to sell its FSA insurance business to Assured Guaranty (AGO.N: Quote, Profile, Research, Stock Buzz).
Among drugmakers, Bayer (BAYG.DE: Quote, Profile, Research, Stock Buzz) added 2.9 percent, GlaxoSmithKline (GSK.L: Quote, Profile, Research, Stock Buzz) rose 3.7 percent, and Merck (MRCG.DE: Quote, Profile, Research, Stock Buzz) rose 2.1 percent.
G20 leaders headed to Washington on Friday for a summit aimed at seeking solutions to the world's biggest financial crisis in decades.
Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC-40 .FCHI rose between 2.6 and 3.9 percent. (Additional reporting by Brian Gorman and Atul Prakash in London; editing by Simon Jessop)
