* FTSEurofirst 300 index up 1.2 percent
* Payrolls data not as bad as feared
* Insurers lead market higher
By Brian Gorman
LONDON, Jan 9 (Reuters) - European shares rose on Friday
afternoon after figures showed the pace of U.S. job losses in
December was less dramatic than feared, with insurers leading
the market higher.
At 1420 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1.1 percent at 880.17 points.
U.S. employers slashed payrolls by 524,000 in December,
driving the unemployment rate to its highest level in almost 16
years, a government report showed, suggesting that the year-long
recession was deepening. []
The figures were better than some forecasts.
"This is considerably better than the 750,000 we were
forecasting," said Rob Carnell, chief international economist at
ING. However, he pointed to revisions upwards for previous
months.
Manoj Ladwa, senior trader at spread trading firm ETX
Capital, said: "The market was expecting these to be an unholy
trinity of numbers but with non-farm payrolls in line,
unemployment only slightly higher and average hourly earnings
positive, I think we could see a short-term bounce.
"However, I would tell investors not to fall in love with
any upside. This is still a bear market rally and the bias is
still on the downside."
Insurance stocks were up, with the DJ Stoxx insurance index
<.SXIP> the leading sectoral gainer, up 3.2 percent.
Germany's Allianz <ALVG.DE> was the top performer in the
sector, up 7.4 percent, as traders and analysts pointed to news
that the sale of its Dresdner Bank unit to Commerzbank <CBKG.DE>
was nearly concluded.
Munich Re <MUVGn.DE>, Old Mutual <OML.L> and Aviva <AV.L>
were all up between 2.9 and 5.4 percent.
NESTLE FALLS
Shares in Nestle <NESN.VX>, the world's biggest food group,
fell 1.9 percent after a JPMorgan downgrade to "underweight"
from "neutral".
Across Europe, weak industrial output data painted a bleak
picture. British manufacturing output slumped at its fastest
annual pace since the early 1980s and much more than expected in
November. []
In Germany, industrial output fell by more than expected in
November, dipping 3.1 percent from the previous month due to a
sharp downturn in manufacturing activity. []
GlaxoSmithKline <GSK.L> and AstraZeneca <GSK.L> were up 2
and 1.7 percent respectively, with Morgan Stanley raising its
price targets for the companies.
French carmaker Renault <RENA.PA> rose 6.2 percent after
posting sales figures for 2008 that were not as bad as some
analysts had forecast.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC-40 <> were up between 0.4 and 1.2
percent.
U.S. futures turned positive after the labour data. Futures
for the Dow Jones <DJc1>, S&P 500 <SPc1> and Nasdaq <NDc1> were
all up 0.4 percent.
(editing by John Stonestreet)
