* FTSEurofirst 300 index closes 0.2 percent higher
* Banks rise, led by heavyweight HSBC
* DSM drops after Q4 results
By Brian Gorman
LONDON, Feb 24 (Reuters) - European shares closed higher on
Wednesday, with banks gaining, helped by U.S. Federal Reserve
Chairman Ben Bernanke saying interest rates would remain at very
low levels for a long time.
The pan-European FTSEurofirst 300 <> index of top
shares rose 0.2 percent to close at 1,013.66 points, after going
in and out of positive territory several times, and after
falling 1.1 percent in the previous session.
The index is up 57 percent from its lifetime low of March 9
2009, but down 5.7 percent from a 15-month peak it reached last
month, partly on worries about Greece.
Bernanke told Congress that a weak job market and low
inflation would likely allow the central bank to keep interest
rates at very low levels for a long time. []
His view on the economy's weakness was reinforced by
downbeat housing data.
Sales of newly built U.S. single-family homes unexpectedly
fell to a record low in January, according to government data
that hinted at potential trouble for the fragile housing market
recovery. []
Colin McLean, managing director at Scottish Value Management
in Edinburgh, said the housing market was "looking fairly weak
there, as it is here," pointing to a steep drop in shares of
Barratt Developments <BDEV.L>, which fell 5.8 percent, despite
the housebuilder sharply reducing losses amid higher prices.
[]
He added: "People are still nervous about financials, and
the Greek and European solution. Some of the resources shares
may have peaked. And the key characteristic in the market is low
volumes."
Banks gained amid what is proving to be a generally positive
reporting season for the sector. Index heavyweight HSBC
<HSBA.L>, which reports on Monday, rose 2.5 percent.
Royal Bank of Scotland <RBS.L> and Lloyds Banking Group
<LLOY.L>, which report results on Thursday and Friday
respectively, rose 0.4 percent and 3.4 percent.
Others on the rise included Societe Generale <SOGN.PA>,
Standard Chartered <STAN.L> and UBS <UBSN.VX>, up between 1.2
and 1.9 percent.
But Spanish banks Banco Santander <SAN.MC> and BBVA
<BBVA.MC> fell 1.4 and 1.8 percent respectively, after Barclays
downgraded both to "underweight".
Across Europe, the FTSE 100 <> index ended the day 0.5
percent higher, while Germany's DAX <> and France's CAC 40
<> both rose 0.2 percent.
Wall Street was higher around the time European bourses were
closing. The Dow Jones <>, S&P 500 <.SPX> and Nasdaq
Composite <> were up between 1 and 1.1 percent.
OILS GAIN
Energy companies gained after crude futures <CLc1> rose to
more than $80 a barrel, boosted by the dollar falling after
Bernanke's comments.
BP <BP.L>, Royal Dutch Shell <RDSa.AS> and StatoilHydro
<STL.OL> rose between 0.5 and 1.3 percent.
Among individual movers, Dutch chemicals group DSM <DSMN.AS>
fell 5.4 percent after posting an unexpected fourth-quarter net
loss and not giving an outlook for 2010. []
Others in the sector to fall included Akzo Nobel <AKZO.AS>
and BASF <BASF.DE>, down 2.2 and 1.5 percent respectively.
Wolters Kluwer <WLSNc.AS> lost 2.2 percent after the Dutch
publisher forecast a slow economic recovery this year when
missing expectations for 2009, raising concerns about its growth
prospects and sending shares to a three-month low.
On the upside, Fresenius Medical Care <FMEG.DE> added 4.3
percent after the world's largest kidney dialysis firm posted
fourth-quarter earnings above expectations. []
Carnival <CCL.L> rose 3.5 percent after saying it will
increase its prices by up to 5 percent for all summer sailings,
following strong wave season bookings at the world's largest
cruise operator. []
In European economic news, Germany's economic recovery
stalled in the fourth quarter of 2009, as weak private
consumption and investment offset a jump in exports, leaving
Europe's largest economy on a weak footing going into 2010.
[]
(Editing by Mike Nesbit)
