BP shares up; Aviva, BSkyB, STMicroelectronics upgraded By Sarah Turner, MarketWatch LONDON (MarketWatch) -- European shares advanced on Friday, led by gains in the energy sector as BP made its latest move to control the oil spill in the Gulf of Mexico, ahead of data expected to provide clues to the health of the U.S. economy. The Stoxx Europe 600 index (ST:SXXP 250.42, +1.51, +0.61%) climbed 0.8% to 250.95, extending a 1.4% gain from the previous session and on track for a fifth day of gains. Oil and gas firms were in the lead on Friday, with BP (UK:BP. 449.55, +17.30, +4.00%) (BP 39.27, +1.61, +4.28%) shares up 3.9%. The oil giant has placed a cap over the leaking pipe in the Gulf of Mexico, but it remains unclear how successful the latest move will be in capturing the oil, according to media reports. U.S. Coast Guard Adm. Thad Allen said late Thursday that the placement of the containment device was a positive step, but that it would still be some time before the company can confirm that it has worked, Dow Jones Newswires reported. Elsewhere in the sector, Total (FR:FP 39.54, +0.51, +1.29%) (TOT 48.08, +0.90, +1.91%) shares were up 1.4% and Repsol (ES:REP 16.84, +0.10, +0.60%) (REP 20.53, -0.11, -0.53%) shares rose 0.7%. On a regional level, the U.K. FTSE 100 index (UK:UKX 5,237, +26.02, +0.50%) rose 0.8% to 5,254.76, the German DAX index (DX:DAX 6,099, +44.16, +0.73%) climbed 0.9% to 6,110.82 and the French CAC-40 index (FR:PX1 3,575, +17.51, +0.49%) advanced 0.8% to 3,585.78. Asian shares had a muted session and U.S. stock futures were pointing to slight gains ahead of this month's nonfarm payrolls data due at 8.30 a.m. Eastern time. Economists surveyed by MarketWatch are looking for nonfarm payrolls to grow by about 540,000 in May, including about 415,000 census workers. Read more on upcoming payrolls. Data out Friday showed euro-zone gross domestic product edged up 0.2% in the first quarter of 2010, from 0.1% in the last quarter of 2009. "It is likely that growth in the euro zone is going to remain very weak over the course of 2010 and 2011 and as such we do not expect any rise in interest rates this year," said economists at the Centre for Economic and Business Research. Of European-listed companies updating investors, France Telecom (FR:FTE 15.85, +0.20, +1.25%) (FTE 19.19, -0.01, -0.05%) shares were up 1%. Late Thursday, the firm said it won't go ahead with the merger of its Orange Suisse unit with TDC's Sunrise unit in Switzerland. Vodafone Group (UK:VOD 140.40, +2.60, +1.89%) (VOD 20.41, 0.00, 0.00%) shares were also advancing in the telecom sector, up 1.7%. Analysts at Exane BNP Paribas reiterated their outperform rating on the stock on Friday. They see the firm "as a way to play improving European mobile revenue trends," and pointed to two potential stock-specific triggers: the more likely portfolio streamlining and, by 2011, an expected return of a dividend from Verizon Wireless. Turning to broker action, shares of insurer Aviva (UK:AV. 338.00, -1.10, -0.32%) climbed 0.9% after it was upgraded to buy from neutral at Goldman Sachs and added to the broker's conviction list and its U.K. relative value list. "In our opinion, Aviva's share price has been disproportionately affected by European sovereign-credit concerns and the potential for a large rights issue in the sector," they said. Investors may increasingly look to IFRS-based valuations, which should support Aviva, they said. Shares of chip maker STMicroelectronics (FR:STM 6.73, +0.14, +2.08%) (STM 8.05, 0.00, 0.00%) rose 2.8% after it was upgraded to neutral from sell at UBS. The broker said that while many long-term structural concerns on the firm remain, valuation is not stretched. U.K. satellite broadcaster British Sky Broadcasting climbed 2.1% after it was upped by J.P. Morgan Cazenove to overweight from neutral, with the broker saying margins have reached an inflection point and that strong earnings growth looks achievable. BSkyB is roughly 40%-owned by News Corp. (NWS 15.37, -0.06, -0.39%) , the parent of MarketWatch.

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