By Amanda Cooper
LONDON, April 25 (Reuters) - European shares rose on Friday,
led by technology stocks, after Swedish telecom equipment maker
Ericsson <ERICb.ST> roundly beat expectations with its earnings
figures, while the banking sector stabilised.
Ericsson shares rose as much as 27 percent at one point
during the day, after the mobile phone network equipment maker's
surprisingly robust first-quarter profits.
Ericsson shares ended up 16.6 percent, helping push the DJ
Stoxx index of European technology shares up 3.4 percent,
putting it on track for its first monthly gain since September
last year.
Beyond techs, financials were the top performing sector,
gaining after a couple of weeks in which results at several
institutions have not been quite as bad as feared, and a number
of banks have taken measures to shore up their balance sheets,
giving investors confidence that perhaps the worst of the credit
crunch is over.
The FTSEurofirst 300 <> index of top European shares
was up 1.1 percent at 1,330.84 points, having hit a session peak
of 1,336.70 -- its highest since late February -- which marked a
gain of as much as 1.6 percent.
The index has risen nearly 0.4 percent this week, putting it
on track for a 5.4 percent gain in April, making this its best
monthly performance since October 2003.
But the European equity market is still nearly 20 percent
below last year's highs and has lost 12 percent this year as
interbank lending rates stay high and economic data suggests the
slowdown in the United States is spreading.
This week in the euro zone, German business sentiment hit
its lowest since January 2006, while euro zone manufacturing
data came in soft enough to boost expectations for a cut in
regional interest rates this year.
"The economic data in Europe is starting to deteriorate ...
yet at the same time, the cyclical area of the market is
producing reasonable numbers and guidance," said Andrea
Williams, head of European equities at Royal London Asset
Management.
"There is a definite disconnect between the economic data
and the credit crisis and the impact that has on share price
performance."
About 10 percent of the components of the broader DJ Stoxx
600 index <> have reported first-quarter earnings, and
more than half have beaten expectations, according to data from
Thomson Reuters.
This week major cyclical names such as BASF <BASF.DE>, Bayer
<BAYG.DE> and ABB <ABBN.VX> have delivered results that beat
forecasts, raising hopes among investors that the resilience of
the emerging market world may be enough to offset weakness
stemming from a U.S. or European slowdown.
The technology sector has been one of the better performers
this week thanks to strong earnings at some of the major U.S.
firms such as Intel <INTC.O> and IBM <IBM.N>. In Europe,
Alcatel-Lucent <ALUA.PA> was up 6.4 percent, and
STMicroelectronics <STM.PA> rose 5.5 percent.
The DJ Stoxx European bank index <.SX7P> was up 1.7 percent,
with UBS <UBSN.VX> rising 3.6 percent, Credit Suisse <CSGN.VX>
2.5 percent and Barclays <BARC.L> 2.6 percent.
"The sentiment overall is good, probably because there's no
new bad news from the bank sector," said Stefan Chmielewski, a
trader at Lang & Schwarz brokerage in Duesseldorf.
Around Europe, London's FTSE 100 <> added 0.7 percent,
while Frankfurt's DAX <> was up 1.1 percent, and Paris's
CAC 40 <> put on 1 percent.
The FTSE got a late boost from a brief rally in the oil
price <CLc1>, which jumped following reports that a cargo ship
contracted by the U.S. Military Sealift Command fired "a few
bursts" of warning shots in the Gulf at small boats believed to
be Iranian, U.S. defence officials said on Friday.
Oil rose to $119.20 a barrel, helping push up
FTSE-heavyweights BP <BP.L> and Royal Dutch Shell <RDSa.AS> by
0.9 and 1.1 percent, respectively.
The European travel and leisure sector <.SXTP> rose 3.2
percent, led by a 4.1 percent rise for German airline Lufthansa
<LHAG.DE> after its first-quarter profit beat market consensus.
Analysts described the figures as "striking" and "excellent".
On the downside, shares in WPP Group Plc <WPP.L> fell 6
percent to a five-week low after the world's second-largest
advertising company reported first-quarter like-for-like revenue
growth towards the lower end of forecasts.
"The risk is firmly on the downside as advertising budgets
are gradually adjusted to reflect weakening economic conditions
through the year," Cazenove said in a note.
Also in the media sector, German broadcaster ProSiebenSat.1
<PSMG_p.DE> saw more than a quarter of its market value wiped
out after reporting a steep slide in quarterly earnings.
(Additional reporting by Blaise Robinson in Paris and Peter
Starck in Frankfurt, editing by Will Waterman)
