* FTSEurofirst 300 index inches higher
* Credit Agricole leads banks higher
* Beverage sector down after Diageo cuts profit target
* For up-to-the-minutes stocks news, click on []
By Dominic Lau
LONDON, Aug 27 (Reuters) - European shares rose slightly in
early trade on Thursday as gains in financials and utilities
offset weakness in the beverage sector after Diageo <DGE.L>
lowered its profit target.
By 0811 GMT, the FTSEurofirst 300 <> of top European
shares was up 0.2 percent at 975.75 points, after ending a
four-day winning run on Wednesday.
"The longer-term outlook is still probably positive and as
long as interest rates and inflation stay very low, people are
still looking for things to invest which actually generate
meaningful yield," said Edmund Shing, strategist at BNP Paribas,
in Paris.
GDF Suez <GSZ.PA> led utilities higher, up 2.6 percent after
the French power and gas group reported first-half core earnings
in line with expectations and confirmed financial and
cost-cutting targets.
Banks were higher, led by a 5.4 percent surge in Credit
Agricole <CAGR.PA> after France's biggest retail bank posted
better-than-expected second-quarter profit, helped by higher
earnings at its investment banking and asset management
divisions.
Barclays <BARC.L>, Royal Bank of Scotland <RBS.L>, Societe
Generale <SOGN.PA>, Natixis <CNAT.PA> and UBS <UBSN.VX> put on
0.9-10.5 percent.
But Dexia <DEXI.BR>, bailed out by several European
governments last year, shed 5.7 percent after saying its
restructuring was proceeding well as it posted its second
consecutive quarterly profit.
Shing said the economic picture remained mixed, which was
shown in the Japanese currency <JPY=>.
The yen rose broadly as investors fretted that a rally in
risk assets since March may have run ahead of a recovery in the
global economy and on worries about the outlook for Chinese
shares <>, which eased 0.7 percent.
German consumer sentiment rose to its highest level in 15
months heading into September, the GfK market research group
said, as lower prices and a stable labour market left consumers
more willing to spend.
But in the United States, non-defence capital goods orders
excluding aircraft, a closely watched proxy for business
spending, slipped 0.3 percent in July. Analysts polled by
Reuters had expected core capital goods to rise 1 percent.
DIAGEO OUT COLD
Diageo <DGE.L> shed 3 percent after the world's biggest
spirits group met forecasts with a 10 percent rise in full-year
earnings, but cut its profit target for the current year.
Within the sector, Pernod Ricard <PERP.PA> lost 2.1 percent.
Miners also eased, tracking softer metal prices as investors
fretted Chiense attempts to curb overcapacity in some sectors,
including steel, cement and silicon.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Xstrata
<XTA.L> and Rio Tinto <RIO.L> were down 0.1-0.7 percent.
But Kazakhmys <KAZ.L> gained 3.9 percent after first-half
earnings beat market expectations.
In the auto sector, Volvo <VOLVb.ST> dropped 3.1 percent
after the world's second-biggest truckmaker said shipments fell
54 percent year-on-year in July as the economic downturn weighed
on demand for commercial vehicles across the globe.
Renault <RENA.PA> fell 1.9 percent.
Among other individual movers, French hotel group Accor
<ACCP.PA> surged 9 percent after saying it was considering
splitting the company in two autonomous units for its prepaid
services and hotels, as it reported a big drop in first-half
pretax profit.
Across Europe, Britain's FTSE 100 <> added 0.1 percent,
Germany's DAX <> was flat and France's CAC 40 <> was
up 0.1 percent.
(Editing by Dan Lalor)
