* FTSEurofirst 300 index up 0.7 pct
* Commods, banks up ahead of GE, Bank of America results
* ENI up after gas discovery
By Joanne Frearson
LONDON, Oct 16 (Reuters) - European shares rose in early
trade on Friday, with banks and energy stocks the biggest
gainers on renewed optimism over growth prospects after strong
results overnight from IBM <IBM.N> and Google <GOOG.O>.
Investors also awaited earnings news from Bank of America
<BAC.N> <BAC.F> and U.S. conglomerate General Electric <GE.N>
<GEC.F>, whose shares were up 1.3 percent and 1.9 percent,
respectively, in Frankfurt.
By 0821 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.7 percent at 1,024.19 points.
The FTSEurofirst 300 has surged 59 percent since reaching a
record low in early March but is still down 37 percent from a
multi-year peak reached in mid-2007.
"General Electric figures are seen better. But in the
banking sector there is a division," said Justin Urquhart
Stewart, director at Seven Investment Management.
"As far as the investment banking side has been concerned
these have been very good figures, but not sure if they are
going to be repeated and on the retail side it is going to get
weaker," he said.
Banking shares were in the spotlight. Lloyds Banking Group
<LLOY.L> gained 3.3 percent, supported by a Deutsche Bank
upgrade and news it was to sell its loss-making Halifax estate
agency business to LSL Property Services <LSL.L>.
HSBC <HSBA.L>, Banco Santander <SAN.MC> and Credit Suisse
<CSGN.VX> were up 0.7 to 1.4 percent.
ENERGY STOCKS HIGHER
Energy shares added the most points to the index after oil
gained ground for a seventh session and hit a one-year high
above $78 a barrel. BG Group <BG.L>, BP <BP.L>, Royal Dutch
Shell <RDSa.L> and Total <TOTF.PA> gained 2 to 2.6 percent.
ENI <ENI.MI> was 2.1 percent higher after the company said
it had made a large gas discovery off the coast of Venezuela.
[]
Ericsson <ERICb.ST> rose 1.4 percent after its Sony Ericsson
joint venture with Japan's Sony <6758.T> posted a smaller than
expected pretax loss in the third quarter, helped by cost cuts.
[]
"What is positive about the report is the 4 percent
sequential increase in the gross margin," WestLB analyst Thomas
Langer said. "Make or break for (Sony Ericsson) will be in the
first half of 2010."
On the downside, telecoms and drugmakers featured among the
worst performers as investors moved away from defensive stocks.
Sanofi Aventis <SASY.PA> and GlaxoSmithKline <GSK.L> were
down 3.3 percent and 0.3 percent respectively, while Vodafone
<VOD.L> and Deutsche Telekom <DTEGn.DE> were 0.6 percent and 1.3
percent lower.
Volkswagen's preference shares <VOWG_p.DE> fell 4.9 percent
after the carmaker asked its shareholder to approve issuing up
to 135 million new preferred shares to pave the way for taking a
stake in Porsche AG <PSHG_p.DE>. []
Across Europe, the FTSE 100 <> index was up 0.7
percent, Germany's DAX <> was 0.6 percent higher and
France's CAC 40 <> rose 0.4 percent.
(editing by John Stonestreet)
