* FTSEurofirst 300 index up 0.8 percent
* Banks gain; HSBC rebounds from falls in previous session
* L'Oreal up on Nestle stake reports
By Harpreet Bhal
LONDON, March 2 (Reuters) - European shares hit a near
six-week closing high on Tuesday, with HSBC <HSBA.L> rebounding
and miners supported by firm metals prices, offsetting falls in
Prudential after it agreed to buy AIG's Asian insurance arm.
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.8 percent higher at 1,027.29 points, hitting its
highest closing level since January 21.
Banks were among the biggest gainers, with heavyweight HSBC
up 2.7 percent, after sharp falls in the previous session
following the release of its results.
Within the sector, Barclays <BARC.L>, Societe Generale
<SOGN.PA>, BNP Paribas <BNPP.PA> and Deutsche Bank <DBKGn.DE>
added 0.7 to 3.1 percent.
"The earnings results that we're seeing have been very
good," said Mike Lenhoff, chief strategist at Brewin Dolphin.
"The recovery that's coming through globally is showing up
in better revenues and there is a green light out there for
equity markets because the Fed is not going to change interest
rates for some time."
Greek banks <.FTATBNK> added 3.3 percent ahead of a meeting
between German Chancellor Angela Merkel and the Greek Prime
Minister on Friday, as confidence grows in financial markets
that Athens might be nearing a deal with European Union
governments to take more budget consolidation steps in return
for some form of aid. []
"The issue concerning sovereign debt is still present but it
looks as if there will be an eventual resolution to it and the
markets are less hung up about it," Lenhoff said.
Greek Prime Minister George Papandreou has called a cabinet
meeting for Wednesday to "take decisions about the economy". The
announcement appeared to signal that Athens is poised to take
new savings measures in the hopes of winning EU support.
Miners were higher, underpinned by metals prices which
stayed in positive territory. Anglo American <AAL.L>, Eurasian
Natural Resources <ENRC.L>, Kazakhmys <KAZ.L>, BHP Billiton
<BLT.L> and Xstrata <XTA.L> rose 1.8 to 2.9 percent.
Bucking the trend, Vedanta Resources <VED.L> shed 3.3
percent as the India-focused mining group launched a $775
million convertible bond issue on Tuesday, seeking to refinance
debt at lower interest rates. []
Among individual gainers, L'Oreal <OREP.PA> gained 2.7
percent after the Daily Telegraph reported that Swiss food group
Nestle <NESN.VX> was rumoured to be in informal talks to buy
Liliane Bettencourt's 31 percent stake in the French cosmetics
group. Nestle was up 0.6 percent.
Kuehne & Nagel International <KNIN.VX> was among the biggest
gainers, up 6.3 percent after announcing results, with brokers
JPMorgan and Vontobel hiking the firm's target price while
Deutsche Bank raised its recommendation to "buy" from "hold".
PRUDENTIAL PRESSURED
On the downside, Prudential <PRU.L> fell 8 percent,
extending its decline for the second session. On Monday, the
insurer said it would pay $35.5 billion for American
International Group's <AIG.N> Asian life insurance arm, and
would undertake a $21 billion rights issue. []
Yara International <YAR.OL> fell 4.4 percent after U.S.
based fertilizer maker CF Industries Holdings Inc <CF.N>
relaunched its hostile bid for Terra Industries Inc <TRA.N>,
betting the higher price of $4.75 billion will help it break up
Terra's planned takeover by Yara International. []
Across Europe, the FTSE 100 <>, Germany's DAX <>
and France's CAC 40 <> were up between 1.1 and 1.45 percent
Gains on Wall Street pushed the Dow index <> into
positive territory for 2010, a day after both the S&P 500 <.SPX>
and Nasdaq <> moved above the break-even mark for the year.
(Editing by Rupert Winchester)
