* FTSEurofirst 300 index close up 0.4 pct
* Bayer gains on drug green light
* Telecom makers fall after Sony Ericsson outlook
By Joanne Frearson
LONDON, March 20 (Reuters) - European shares closed higher
on Friday as Bayer <BAYG.DE> gained after it received a green
light for a drug, while telecommunication makers fell as Sony
Ericsson <6758.T> gave a bearish outlook.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.4 percent higher at 717.88 points in a choppy
session with stocks rising to as high as 719.25 points and
falling to as low as 704.84 points.
"The market is see-sawing today. What we have seen here is
investors downsizing their positions taking half of their
profits out, but still leaving some positions in," said Joshua
Raymond, market strategist at City Index.
"Investors are still fairly confident that the market could
go higher, but yet again they do not want to take the risk in
case the market turns ... there are still concerns about bank
liquidity and return on investment," added Raymond.
Bayer <BAYG.DE> jumped 11.3 percent after the group received
a green light for it's key new drug Xarelto from a U.S. panel,
putting it on track to win approval in its largest market.
[]
"The positive outcome is critical for sentiment and we
expect Bayer to regain some of the multiple that it lost prior
to the advisory committee," analysts at Morgan Stanley said in a
research note.
Energy stocks were major gainers as crude <CLc1> held above
$51 a barrel a day after surging 7 percent following the Federal
Reserve's plan to pump another $1 trillion into the
recession-hit economy.
BG Group <BG.L>, BP <BP.L>, Tullow Oil <TLW.L> and Premier
Oil <PMO.L> were 0.2-6.7 percent higher.
Miners rose as copper <MCU3=LX> gained 0.4 percent. 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 1.5-5.9 percent.
TELECOM MAKERS FALL AFTER SONY ERICSSON OUTLOOK
Telecom equipment makers fell after Sony Ericsson sparked
fresh fear of crumbling consumer demand after the world's No 4
handset maker said it would sell barely half of the phones it
sold last quarter. []
Ericsson <ERICb.ST> lost 9.8 percent and Nokia <NOK1V.HE>
was down 6.2 percent.
"We see this as a negative leading indicator for the Q1
reporting season in the handset market," said Thomas Langer,
analyst at WestLB in a note.
Banking stocks were in the doldrums as investors took
profits following gains on Thursday. HSBC <HSBA.L>, Nordea Bank
<NDA.ST>, Barclays <BARC.L> and BNP Paribas <BNPP.PA> were down
2.3-6.7 percent.
Euro zone industrial output staged a new record plunge in
January, pointing to a further sharp contraction in the economy
this year and boosting pressure for further deep European
Central Bank rate cuts and quantitative easing. []
"The outcome ... strengthens our view that Q1 will be even
worse than Q4. With global demand still at very depressed
levels, companies are reluctant to resume production plans even
though inventories are judged less heavy than at end-2008,"
UniCredit said in a note.
Across Europe, the FTSE 100 <> index was up 0.7
percent, Germany's DAX <> was up 0.6 percent and France's
CAC 40 <> was 0.5 percent higher.
(Additional reporting by Peter Starck; Editing by Erica
Billingham)
