* FTSEurofirst 300 index up 0.6 pct
* Banks reverse earlier losses
* Commodities fall
By Joanne Frearson
LONDON, June 18 (Reuters) - European shares closed higher on
Thursday supported by the U.S. Philadelphia Federal survey which
came in better than expected, while banking stocks reversed
earlier losses to add the most points to the index.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.6 percent at 850.62 points after hitting its
day's high 852.78 points earlier, snapping a four day losing
streak, although the index is down about 3.9 percent for the
week.
"The Philly Fed is quite important as confidence indicators
go and is another positive signal. Contractions are at a slower
pace and that is important," said Howard Wheeldon, strategist at
BGC Partners.
"European markets keep following the U.S. markets, but I
think we are in for a very rude awakening. I think there is a
necessary correction waiting to be had, but clearly we are not
having it today," he said.
The Philadelphia Federal Reserve Bank said manufacturing in
the U.S. Mid-Atlantic area contracted in June for the ninth
consecutive month but much less severely than expected and far
less than in the previous month. []
Also adding to the positive sentiment, was news the number
of U.S. workers filing new claims for jobless benefits rose last
week but the number of people staying on the benefit rolls after
collecting an initial week of aid fell for the first time since
January, a government report showed. []
The banking sector reversed earlier losses to become the
highest movers on the index. ING <ING.AS> was up about 8 percent
after Goldman Sachs upgraded the group to "buy" from "neutral".
Credit Suisse <CSGN.VX> and UBS <UBSN.VX> gained 5.2 percent
and 3.6 percent respectively. The Swiss National Bank said it
will keep its drastic measures to fight recession and calls for
rules to split off parts of its dominant banks and limit their
size if needed to protect the economy. []
COMMODITIES FALL
Miners were lower as copper <MCU3=LX> traded lower earlier
in the day.
Rio Tinto <RIO.L>, Kazakhmys <KAZ.L>, Rangold Resources
<RRS.L> and Lonmin <LMI.L> were down 0.6-4.9 percent.
Energy stocks were in the doldrums as crude <CLc1> hovered
around $71 a barrel. BG Group <BG.L>, BP <BP.L>, Royal Dutch
Shell <RDSa.L> and Galp <GALP.LS> are down 0.7-1.2 percent.
Among individual stock movers, shares in fertiliser and salt
maker K+S <SDFG.DE> fell 2.2 percent after several analysts cut
their target price on the stock after the company's revenue and
earnings warning on Wednesday.
HeidelbergCement <HEIG.DE> jumped 17.4 percent after the
German cement maker secured a 8.7 million euro loan
restructuring plan from its banks, giving it until the end of
2011 to sell assets and cut costs to overhaul its strained
finances.
In other economic news, investors shrugged off news that
British retail sales fell unexpectedly in May as shoppers
tightened their belts after splashing out over Easter, while
government borrowing hit a record high, official data showed.
[]
"Retail sales numbers for May came in lower than analysts
had expected, throwing doubt on any near-term economic recovery.
Those 'green shoots' aren't looking so green now," said Manoj
Ladwa, senior trader at ETX Capital in London.
Across Europe, the FTSE 100 <> index was up 0.1
percent, Germany's DAX <> was up 0.8 percent and France's
CAC 40 <> was 1 percent higher.
(additional reporting by Harpreet Bhal; editing by Elaine
Hardcastle)
