* FTSEurofirst 300 rises 0.5 pct
* Drugmakers, energy shares rise
* Financials retreat after recent gains
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, May 13 (Reuters) - European equities advanced in
choppy morning trade on Wednesday, with investors taking refuge
in defensive drugmakers and energy companies, but financial
stocks retreated after recent heavy gains.
At 0911 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.5 percent at 856.49 points after
falling as low as 849.26. The benchmark, which slumped 45
percent in 2008, is up more than 32 percent from its March 9
lifetime low.
Energy stocks tracked crude oil prices <CLc1>, which rose
1.4 percent to trade near $60 a barrel. Royal Dutch Shell
<RDSb.L>, BG Group <BG.L>, Tullow Oil <TLW.L>, Repsol <REP.MC>,
Total <TOTF.PA> and StatoilHydro <STL.OL> added 0.6-2.7 percent.
Drugmakers were also in demand. AstraZeneca <AZN.L> rose 2.7
percent, Sanofi-Aventis <SASY.PA> gained 3.5 percent and
Novartis <NOVN.VX> was up 3.7 percent.
"The nadir that was March 2009 has been long forgotten, as
talk of 'green shoots' replacing 'credit crunch' as the phrase
of the moment," said Chris Hossain, senior sales manager at ODL
Securities.
"Whether realistic or not, more and more people are buying
in to the recovery play, looking for undervalued stocks."
Financial stocks fell, however, after recent gains as
investors took profits. The DJ Stoxx banks index <.SX7P>, which
hit a six-month high last week, has doubled from a trough in
early March.
HSBC <HSBA.L> was down 3.7 percent, Barclays <BARC.L> fell 4
percent, Lloyds <LLOY.L> slipped 2.9 percent and UBS <UBSN.VX>
declined 4 percent.
Dutch banking and insurance group ING <ING.AS> fell 5.6
percent after it reported a much-bigger-than-expected
first-quarter net loss, hurt by a sharply weaker insurance
business.
"There has been some consolidation after a sharp move in the
past weeks as people are waiting to see whether the upward move
is sustainable," said Koen De Leus, economist at KBC Securities.
"There are some indicators that justify an improvement in
optimism. Recent data has come better than expected and has
rebuilt market confidence, but it still has to be confirmed by
more consumer spending," he added.
MINERS DOWN
Miners also retreated. BHP Billiton <BLT.L>, Anglo American
<AAL.L>, Antofagasta <ANTO.L>, Xstrata <STA.L> and Eurasian
Natural Resources <ENRC.L> were down 1.4 to 3.2 percent.
Rio Tinto <RIO.L> fell 5 percent on growing speculation the
global miner is set to launch a rights issue instead of selling
$19.5 billion in stock and assets to China's Chinalco aluminium
group. []
Belgian-French financial services group Dexia <DEXI.BR>
jumped 7 percent as it declared it was "on the mend" after
first-quarter profit beat expectations due to keen cost control.
J Sainsbury Plc <SBRY.L>, Britain's third-biggest grocer,
posted an 11 percent rise in annual profit and said it was
pressing ahead with expansion into convenience stores and
non-food ranges despite the recession. But its shares were down
0.3 percent.
Telefonica <TEF.MC> rose 1.5 percent as it beat market
expectations with a 9.8 percent rise in first-quarter net
profit, as strong Latin American business helped offset Spanish
weakness and allowed it to stick to full-year forecasts.
(Editing by Simon Jessop)
