* FTSEurofirst 300 index up 1 pct
* Banks gains as sentiment improves
* GlaxoSmithKline up ahead of earnings
By Joanne Frearson
LONDON, July 20 (Reuters) - European shares were higher in
early trade on Monday for the sixth straight day, with banks the
major gainers as sentiment was lifted by a last-minute $3
billion rescue of U.S. CIT Group <CIT.N>.
By 0829 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was up 1 percent at 879.64 points. The index
is up around 36 percent since hitting its lifetime low on March
9.
"Banks have been given a boost by the good results last week
from Goldman Sachs and others. The earnings season especially in
the U.S. has been much better than expected," said Franz Wenzel,
strategist at Axa Investment Managers.
Banks added the most points to the index. Lloyds Banking
Group <LLOY.L> was up 6.2 percent with analysts pointing to a
report in the Sunday Times that the bank, 43 percent owned by
the UK government, will turn a profit in the first half of 2009.
HSBC <HSBA.L>, Barclays <BARC.L>, Banco Santander <SAN.MC>
and Societe Generale <SOGN.PA> were up 1.1-1.7 percent.
Investors confidence was also boosted by news that CIT Group
Inc's board signed off on a deal late on Sunday for $3 billion
in rescue financing from a group of bondholders, in a plan the
lender hopes will stave off bankruptcy, a source close to the
situation said. []
However, Bank of Ireland <BKIR.I> lost 3.2 percent after the
Sunday Tribune reported, citing informed sources, it plans a
rights issue in November to buy out some of the government's
indirect 25 percent stake in the lender. []
SEB <SEBa.ST>, the Swedish banking group, slipped 2.1
percent after it posted a sharply weaker-than-expected
second-quarter operating profit, hit by writedowns as deep
recessions bit into its business in Eastern Europe.
[]
GLAXOSMITHKLINE GAINS AHEAD OF EARNINGS
Drugmaker GlaxoSmithKline <GSK.L> was up 2.4 percent as
analysts expect second-quarter results, to be released on
Wednesday, will show a boost of around 1.3 billion pounds, from
the sale of its swine flu vaccine.
Energy stocks gained as crude <CLc1> rose 1.5 percent after
the dollar fell on hopes of a global economic recovery.
BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and
Total <TOTF.PA> were up 0.6-1 percent.
Miners were higher as metal prices rose. Anglo American
<AAL.L>, Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Eurasian
Natural Resources Corporation <ENRC.L>, Rio Tinto <RIO.L> and
Xstrata <XTA.L> were up 0.4-2.5 percent.
On the downside, defensive stocks were out of favour as
investors bought into cyclicals. British American Tobacco
<BATS.L> and Imperial Tobacco <IMT.L> were down 0.7 percent and
0.6 percent respectively.
Although, analysts have viewed the earnings season so far as
reasonably positive, there was still some degree of scepticism
and caution.
"Companies are carrying out rigorous cost-cutting exercises
and although the bottom line figures are still looking
relatively positive it is at the expense of huge amounts of
cutting. It is not because of any signs of growth or
anticipation of growth at this stage," said Justin Urquhart
Stewart, director at Seven Investment.
Across Europe, the FTSE 100 <> index was up 0.9
percent, Germany's DAX <> was 1.1 percent higher and
France's CAC 40 <> was up 1.1 percent.
(Editing by Mike Nesbit)
