* FTSEurofirst 300 up 0.5 pct, highest close since July 14
* Seven banks failed European stress tests
* Akzo Nobel gains after Q2 beats estimates
By Joanne Frearson
LONDON, July 23 (Reuters) - European shares ended at their
highest in more than a week on Friday, led higher by miners, as
strong corporate results and encouraging economic data improved
market sentiment.
Investors traded cautiously throughout the session ahead of
results of stress tests for 91 European banks, which came in
after the close of the European market.
Organisers of the tests said seven banks would not be strong
enough to withstand another recession and would face a total
capital shortfall of 3.5 billion euros ($4.5 billion).
[]
"This is not surprising that most of them have passed -- the
results are in line with expectations," said Philippe Gijsels,
head of research at BNP Paribas Fortis Global Markets.
"The market will find good news and bad news in this and the
market action on Monday and Tuesday will be very important for
the rest of the month. But we will continue to be volatile."
The pan-European FTSEurofirst 300 <> index of top
shares closed 0.5 percent higher at 1,044.31 points, the highest
close since July 14.
Banking stocks were higher, with the STOXX Europe 600
banking index <.SX7P> up 0.2 percent. Banco Santander <SAN.MC>,
Royal Bank of Scotland <RBS.L> and Commerzbank <CBKG.DE> were up
1.3 to 2 percent.
Stress test results showed five of Spain's smaller regional
lenders, known as cajas, failed the test. Their recapitalisation
will likely speed a restructuring of the troubled sector.
Banks in Germany and Greece were also seen as weak spots and
in need of restructuring, but state-owned Hypo Real Estate was
the only German lender to flunk and state-controlled ATEbank
<AGBr.AT> the only Greek bank to fail.
MINERS UP, ADIDAS GAINS
Dutch company Akzo Nobel <AKZO.AS>, the world's largest
paint maker gained 2.6 percent after reporting better than
expected quarterly results. []
Mining stocks were up as copper <MCU3> rallied to a
two-month high, helped by fund buying. Anglo American <AAL.L>,
Rio Tinto <RIO.L> and Xstrata <XTA.L> rose 0.6-1.9 percent.
Adidas shares <ADSG.DE> gained 2.2 percent after the German
sporting goods company beat forecasts with a big jump in
second-quarter net profit.
British chip designer ARM <ARM.L> soared 11.6 percent after
signing a new licensing agreement with Microsoft <MSFT.O>.
On the downside, Ericsson <ERICb.ST>, the world's number one
mobile network gear maker, slipped 7.1 percent after missing
expectations for second-quarter core profit, as operators stayed
wary about investing and parts shortages again hit sales.
[]
French chipmaker STMicroelectronics <STM.PA> fell 3.6
percent as losses at its ST-Ericsson joint venture offset the
second-quarter profit and stronger than expected sales forecast
it published overnight. []
The market was also supported by economic data, with German
business sentiment posting a record jump in July to its highest
level in three years, as a World Cup buzz underpinned spending
in Europe's largest economy. []
Britain's gross domestic product jumped 1.1 percent in the
second quarter, almost twice as fast as expected, buoyed by a
sharp pick-up in services output and the fastest rise in
construction output in almost 50 years.
Technical charts showed resistance for the Euro STOXX 50
index <>. The euro zone's blue chip index, was up 0.2
percent at 2,719.13 points, trading just below the 50 percent
Fibonacci retracement at 2,737.62 of its fall to a May trough
from an April peak.
Across Europe, the FTSE 100 <> index was down 0.02
percent, Germany's DAX <> was up 0.4 percent and France's
CAC 40 <> was 0.2 percent higher. The Thomson Reuters
Peripheral Eurozone Countries Index <.TRXFLDPIPU> fell 0.6
percent.
(Reporting by Joanne Frearson; Editing by Dan Lalor)
