* FTSEurofirst 300 up 0.3 pct; hits 7-week closing high
* U.S. retail sales, Euro zone industrial output data helps
* Banks advance; drugmakers slip as risk appetite rises
By Atul Prakash
LONDON, March 12 (Reuters) - European shares ended at their
highest level in more than seven weeks on Friday as positive
retail sales data boosted sentiment, while banks rose as U.S.
Senate negotiations to overhaul financial regulation collapsed.
The FTSEurofirst 300 <> index of top European shares
ended 0.3 percent higher at 1,058.97 points, the highest closing
since Jan. 19. The index rose 0.8 percent this week and is up 64
percent since hitting a record low in March last year.
Financial stocks were among the top gainers, with the STOXX
Europe 600 banking sector index <.SX7P> rising 0.8 percent.
Standard Chartered <STAN.L>, Barclays <BARC.L>, Lloyds <LLOY.L>
and Royal Bank of Scotland <RBS.L> rose 0.6 to 5 percent.
"There are some encouraging signs. The latest one came
today, with U.S. retail sales figures coming out better than
expected and indicating that American consumers so far are
holding quite well," said Luc Van Hecka, chief economist at KBC
Securities.
Data showed sales at U.S. retailers rose unexpectedly in
February despite a drop in vehicle purchases and inclement
weather that was expected to curtail shopping. []
Figures also showed that Euro zone industrial output in
January recorded its biggest monthly increase on record and
numbers for December underwent a radical upward revision,
boosting hopes that economic recovery remains on course.
[]
"But there is some legitimate caution. Governments have done
well in avoiding a depression but they are left with quite
severe budget deficits ... There are limits and doubts," Hecka
said.
Market speculation that China would tighten monetary policy
imminently to rein in growth and inflation also remained in the
background, analysts said.
European shares pared gains in the afternoon session after a
survey showed that U.S. consumer sentiment declined slightly in
early March, with Americans less positive about the job outlook.
[]
Shares in industrial engineering companies also gained
ground, with Volvo <VOLVb.ST>, Sandvik <SAND.ST>, Konecranes
<KCR1V.HE>, Kone <KNEBV.HE> and Rotork <ROR.L> rising 1.8 to 2.8
percent.
RISK APPETITIE RISES
But pharmaceutical shares, generally seen as defensive
plays, slipped as risk appetite rose.
The VDAX-NEW volatility index <.V1XI> fell to its lowest
level in nearly two years. The lower the index, which is based
on sell and buy options on Frankfurt's top-30 stocks <0#.GDAXI>,
the higher the market's desire to take risk.
Roche Holding <ROG.VX> fell 3 percent after news that its
Avastin drug did not help men with late stage prostate cancer
live longer in a clinical trial, marking another setback for the
Swiss group as it tried to extend use of the blockbuster drug
into new areas. []
Other drugmakers were also down, with AstraZeneca <AZN.L>,
GlaxoSmithKline <GSK.L>, Novartis <NOVN.VX>, Novo Nordisk
<NOVOb.CO>, Sanofi-Aventis <SASY.PA> and Shire <SHP.L> declining
0.3 to 0.6 percent.
Across Europe, Britain's FTSE 100 index <> rose 0.2
percent, Germany's DAX <> gained 0.3 percent and France's
CAC 40 <> ended flat. The European equity markets traded in
a narrow range this week.
"It would not be surprising to see some more indecisive
trading in the days ahead as London waits to see if other stock
markets still have some fuel left in their tanks," said David
Jones, chief market strategist at IG Index.
Yara International <YAR.OL> was among the top gainers. It
jumped 6.7 percent after the company said it would not raise its
offer for Terra Industries <TRA.N> to match or exceed a rival
bid from CF Industries Holdings Inc <CF.N>.
Shares in BSkyB <BSY.L> rose 5 percent with traders citing
talk that Rupert Murdoch could take the British satellite
broadcaster private. []
(Editing by Greg Mahlich)
