* FTSEurofirst 300 index up 0.1 pct
* Novartis gains as produces flu drug
* Banks reverse early losses
By Joanne Frearson
LONDON, June 12 (Reuters) - European shares rose on Friday
morning as positive data from China helped lift investor
spirits, while Novartis <NOVN.VX> gained after it made its first
batch of H1N1 vaccine ahead of expectations.
By 0847 GMT, the pan-European FTSEurofirst 300 <> was
up 0.1 percent at 888.72 points. The index has risen around 37
percent since reaching a low in early March.
"Last night we got better than expected Chinese data,
following better than expected U.S. data yesterday ... We are
getting a view that we can come out of the recession and have a
reasonable degree of economic recovery globally," said Bernard
McAlinden, market strategist at NCB Stockbrokers.
China's May factory output rose more than forecast and
retail sales growth accelerated, giving new impetus to investor
hopes the world's third-largest economy can lead a global
revival. []
On Thursday data showed sales at U.S. retailers rose in May
for the first time in three months, and the number of workers
filing new applications for jobless benefits fell for a fourth
straight week last week. []
Drugmakers were the biggest gainers with Novartis up 1.9
percent after saying it had produced a first batch of a vaccine
to fight the H1N1 flu outbreak, which will start clinical trials
in July. The company said it expects to be able to ramp up
manufacture rapidly. []
GlaxoSmithKline <GSK.L>, AstraZeneca <AZN.L> and
Sanofi-Aventis <SASY.PA> were 0.8 to 2.8 percent higher.
Across Europe, the FTSE 100 <> index was up 0.04
percent, Germany's DAX <> was down 0.2 percent and
France's CAC 40 <> was up 0.03 percent.
BANKS REVERSE EARLIER LOSSES
Banks recovered from earlier losses as Deutsche Bank said
most European banks would pass a "stress test", although stocks
within the sector were mixed.
BNP Paribas <BNPP.PA>, UBS <UBSN.VX>, Royal Bank of Scotland
<RBS.L> were up 0.9 to 4 percent.
British bank Barclays <BARC.L> lost 1.5 percent after
agreeing to sell its investment arm BGI for $13.5 billion.
Energy stocks were lower as crude <CLc1> slid towards $72 a
barrel, as investors locked in gains from a near eight-month
high settlement a day ago. Cairn Energy <CNE.L>, Tullow Oil
<TLW.L>, Royal Dutch Shell <RDSa.L> and Total <TOTF.PA> were
down 0.3 to 1.4 percent.
Miners were in the doldrums as copper <MCU3=LX> fell 1.3
percent. Vedanta Resources <VED.L> dropped 5 percent after the
group launched a $1.0 billion convertible bond issue, partly to
help finance takeovers and to boost ownership of subsidiaries.
[]
Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Eurasian Natural
Resources Corporation <ENRC.L>, Rio Tinto <RIO.L> and Xstrata
<XTA.L> were down 0.6 to 2.6 percent.
Later in the session, investors may focus on the G8 finance
minsters meeting in Italy.
"The finance meeting will be interesting to see what leads
it may provide. There is still obviously the concern of
potential contagion coming out of eastern Europe and whether we
are getting any stability, though I do get the impression there
is some," said Justin Urquhart Stewart, director at Seven
Investment.
The Reuters/University of Michigan Surveys of Consumer
sentiment is due for release at 1355 GMT. Economists in a
Reuters survey expect a reading of 69.5 compared with 68.7 in
the final May report.
(Editing by David Holmes)
