By Blaise Robinson
PARIS, April 25 (Reuters) - European shares rose early on
Friday to hit a three-week high as Ericsson <ERICb.ST> and Volvo
<VOLVb.ST> posted strong earnings, soothing investors' fears
about the impact of a U.S. economic slowdown.
Ericsson jumped more than 20 percent to reach its highest
level since mid-January, fuelling a rally among telecom gear and
handset makers such as Alcatel-Lucent <ALUA.PA>, up 8 percent,
and Nokia <NOK1V.HE>, up 2 percent.
But the gains were limited by softening shares of mining
groups, which fell for a second day in a row after lofty
advances made during the month. Anglo American <AAL.L>, BHP
Billiton <BLT.L> and Xstrata <XTA.L> were down between 1.5
percent and 2.1 percent.
At 0837 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1 percent at 1,329.53 points, on track to
end the week with a tiny gain of 0.2 percent.
"The reporting season is in focus, and all in all, the tone
is positive," said Achim Matzke, European stock indexes analyst
at Commerzbank in Frankfurt.
"Since the start of April, we've had a recovery movement
after the bear market in the first quarter, and this recovery
should continue, although the momentum is not very high."
Ericsson, in its first upbeat news since an earnings
collapse last year, reported better first-quarter profits and
margins than expected. The stock is still down 48 percent from a
peak reached last July.
Volvo, the world number two truck maker, also pleased the
market with quarterly pretax earnings above market expectations
and a more upbeat view on its key European market.
Banks were also on the rise, with UBS <UBSN.VX> up 3.9
percent, Credit Suisse <CSGN.VX> up 3.6 percent and Societe
Generale <SOGN.PA> up 2.2 percent, gaining ground on renewed
optimism that the global credit crisis that has rocked the
sector may be easing.
"The ability for the markets to remain at the higher end of
the recent trading range is giving more comfort to investors,"
Simon Denham, managing director at Capital Spreads wrote in a
note.
Thursday's news that Merrill Lynch <MER.N> left its dividend
unchanged and Credit Suisse cut its exposure to risk gave
investors some hope that the financial sector was stabilising.
Banks have spooked investors with massive asset writedowns
and emergency capital increases after investments in the risky
U.S. subprime mortgage market turned sour.
European stocks also got a boost on Friday from currency
markets as the U.S. dollar steadied against the euro, easing
pressure on exporters. The DJ Stoxx auto index <.SXAP> gained
1.3 percent.
The FTSEurofirst 300 is down 12 percent on the year, hit by
worries over the prospect of a U.S. recession and fears of more
writedowns in the banking sector.
Around Europe, Germany's DAX index <> was up 0.9
percent, UK's FTSE 100 index <> up 0.4 percent and France's
CAC 40 <> up 0.9 percent.
Lufthansa <LHAG.DE> rose 3 percent after the German airline
reported first-quarter earnings above market expectations.
ProSiebenSat.1 <PSMG_p.DE> dropped 25 percent after the
company said first-quarter core earnings tumbled due to weak
performance of its German free TV business and uncertainties
linked to its advertising sales model.
WPP <WPP.L> shed 5.5 percent. The world's second-biggest
advertising company, WPP reported first-quarter like-for-like
revenue growth towards the low end of analysts' expectations.
(Editing by Quentin Bryar)
