By Amanda Cooper
LONDON, April 30 (Reuters) - European shares rose on
Wednesday, boosted by data that suggested the U.S. economy may
be stabilising and bullish updates from the likes of Siemens
<SIEGn.DE> and Novo Nordisk <NOVOb.CO>.
Siemens, Europe's biggest engineer, rose 3 percent and was a
key market driver after Chief Executive Peter Loescher said he
was guardedly optimistic about the second half of 2008.
Novo Nordisk helped buoy the pharmaceutical sector after the
Danish company beat expectations for quarterly operating profit
and sales, lifting its shares by 5.6 percent.
Acting as a slight drag on the broader market was a 5.9
percent drop in shares of British energy company BG Group
<BG.L>, which unveiled a bid for an Australian rival that some
analysts viewed as too pricey.
A stream of U.S. data that showed above-forecast
first-quarter growth and private sector employment for April,
along with a monthly regional business activity index that beat
expectations, all helped to lift European markets.
The FTSEurofirst 300 index <> of top European shares
closed up 0.7 percent at 1,337.68 points.
The index has risen 6 percent in April, making this its best
monthly performance since October 2003 and putting it on course
for its first quarterly gain since the second quarter of 2007.
"In the medium-term, I think rallies are sustainable because
equities are decent value for the economic outlook I've got,
which is a troublesome three to six months from now, but...by
2009 economies should be getting better," said Andrew Bell, a
European equity strategist at Rensburg Sheppards Investment
Management.
Chasing rallies too aggressively may however be a dangerous
tactic in the short-term, Bell added, as earnings visibility
remains low and the financial sector had yet to purge itself of
the troubles stemming from the meltdown in the U.S. subprime
lending market.
Banks were positive influences on the market having pared
earlier losses after the flurry of more positive U.S. data.
HSBC <HSBA.L> gained 1 percent, while Credit Suisse
<CSGN.VX> rose 0.9 percent and Banco Santander <SAN.MC> rose 1.1
percent.
The next risk event for equities is the Federal Reserve's
decision on monetary policy at 1815 GMT.
Economists polled by Reuters expect the Fed to cut rates by
a quarter of a percentage point to 2.00 percent, taking rate
reductions for the year to 225 basis points.
But several analysts believe this may be the last rate cut
of the current cycle as the economy is showing signs of
stabilising and inflationary pressures remain high. The Fed's
post-decision statement will be scrutinised for any such hints.
"The Fed will probably ease its way into a position where it
can put policy on hold -- the markets have been expecting 25
basis points, and my guess is that they will concede that," said
Mike Lenhoff, chief strategist at Brewin Dolphin.
Among stocks which fell, French-American telecom equipment
maker Alcatel-Lucent <ALUA.PA> shed 3.6 percent after cutting
its global telecom equipment sector forecast.
Across Europe, Britain's FTSE 100 <> was flat, but
registered a 6.8 percent gain this month, its largest monthly
rise in five years. Germany's DAX <> gained 0.9 percent,
bringing April's gains to 6.3 percent, while France's CAC-40
<> rose 0.4 percent, up 6.1 percent this month.
Miners fell for the second day in a row, led by a slide in
some base metal prices. Vedanta <VED.L> fell 4.5 percent,
Kazakhmys <KAZ.L> slipped 4 percent, and Rio Tinto <RIO.L> lost
1.7 percent.
German business software maker SAP <SAPG.DE> fell 2 percent
after delaying a rollout of new software and reported
weaker-than-expected first-quarter sales and earnings.
(Additional reporting by Sitaraman Shankar in London and Eva
Kuehnen in Frankfurt)
