* FTSEurofirst 300 ends up 0.4 pct
* Fears of swine flu pandemic help pharma stocks
* Banks, energy, mining shares slip
By Atul Prakash
LONDON, April 27 (Reuters) - European shares recovered to
end higher on Monday after being under pressure for most of the
day on fears of a swine flu pandemic, with drugmakers up on
hopes of more vaccine demand and other defensives also rising.
The FTSEurofirst 300 <> index of top European shares
closed up 0.4 percent at 813.69 points after falling to 795.54
earlier in the session.
GlaxoSmithKline <GSK.L> rose 5.7 percent, AstraZeneca
<AZN.L> was up 3.7 percent, Sanofi-Aventis <SASY.PA> gained 2.4
percent and Roche <ROG.VX> rose 3.5 percent.
"It's very easy to identify specific sectors that could be
vulnerable to the problem, like the travel sector, the airlines,
the hotel sector, but overall sentiment is still reasonably
positive after gains that we have seen over the past few weeks,"
said Henk Potts, equity strategist at Barclays Stockbrokers.
"The slight improvement that we are seeing, in terms of
economic data along with a more positive reporting season, is
outweighing the potential risk of a swine flu developing and
becoming more serious," he said.
A World Health Organisation emergency committee could raise
its pandemic alert level to phase four or five as a deadly swine
flu outbreak shows no signs of slowing, a spokesman for the
agency said. []
The virus has killed more than 100 people in Mexico and
spread to North America and Europe.
The pandemic alert hit travel and leisure stocks. Lufthansa
<LHAG.DE> fell 9 percent, British Airways <BAY.L> was down 7.3
percent, Air France-KLM <AIRF.PA> slipped 6.3 percent and Tui
Travel <TT.L> fell 3.3 percent.
Cruise operator Carnival <CCL.L>, owner of Cunard, was down
6.8 percent, French hotel major Accor <ACCP.PA> lost 3.7
percent, while travel groups Thomas Cook Group <TCG.L> was down
4.4 percent.
"The effect on the market is likely to be temporary, though
obviously nobody knows what is going to happen," said Arthur Van
Slooten, a strategist at Societe Generale, in Paris.
"There has been some wild speculation. But this can create a
nice entry point, and we would buy into weakness."
DEFENSIVE STOCKS GAIN
Defensive stocks generally rose. E.ON <EONGn.DE> was up 3
percent, National Grid <NG.L> rose 4.3 percent, Severn Trent
<SVT.L> gained 2.4 percent and Centrica <CNA.L> was up 2.4
percent.
Sperian Protection <SPEP.PA>, the maker of protective
equipment, soared 23 percent as it was seen benefiting from the
threat of a pandemic.
Shares in Marine Harvest Group <MHG.OL>, the world's biggest
fish farmer, rose more than 6 percent, with traders speculating
that swine flu could lift salmon prices as witnessed during
previous outbreaks of bird flu and cow disease.
Banks remained under pressure and took most points off the
European stock index. Standard Chartered Bank <STAN.L>, HSBC
<HSBA.L>, Barclays <BARC.L>, BNP Paribas <BNPP.PA>, Societe
Generale <SOGN.PA> and Credit Agricole <CAGR.PA> fell between
0.4 percent and 3.8 percent.
"Market reaction to the flu news has been quite muted so
far, and after weathering the likes of SARS and bird flu in
recent years, there seems to be an element of wait-and-see
amongst traders," said Anthony Grech, strategist at IG Index.
"At the moment there's still a distinct lack of enthusiasm
to push the market in any meaningful direction."
Energy shares retreated as crude <CLc1> fell 1.7 percent.
Royal Dutch Shell <RDSb.L>, BG Group <BG.L>, Tullow Oil <TLW.L>,
Repsol <REP.MC>, Total <TOTF.PA> and StatoilHydro <STL.OL> shed
between 0.3 percent and 2.5 percent.
Miners were under pressure as metal prices fell. Anglo
American <AAL.L>, BHP Billiton <BLT.L>, Rio Tinto <RIO.L> and
Eurasian Natural Resources <ENRC.L> fell 0.1 percent to 3.1
percent.
Across Europe, the FTSE 100 index <> was up 0.3
percent, Germany's DAX <> rose 0.4 percent, but France's
CAC 40 <> was flat.
(Additional reporting by Brian Gorman; Editing by Andrew
Macdonald)
