Financials lead European stocks up; BoE, ECB eyed

                                
 * FTSEurofirst 300 index up 1.4 pct
* Financials rise after results, U.S. optimism
                                
 * BoE, ECB decisions eyed
* Societe Generale falls after results
By Joanne Frearson
                                
 LONDON, May 7 (Reuters) - European shares rose early on
Thursday, on track for the main index's first seven-day winning
streak since August 2007 as investors awaited rate decisions
from the Bank of England and ECB and heavyweight financial
stocks gained on results and overnight optimism in the U.S.
                                
 By 0835 GMT, the pan-European FTSEurofirst 300 <.FTEU3>
index was up 1.4 percent at 870.57 points.
                                
 At 1100 GMT the BoE is expected to leave rates at a record
low. The ECB at 1145 GMT is widely anticipated to cut interest
rates to 1.0 percent with attention turning to what additional
steps, such as quantiatitive easing, they could take to fight
the recession.
                                
 "Being a supporter of what (ECB President Jean-Claude)
Trichet has done, I think the conservative approach that the
Eurozone has taken has so far been right because inflationary
concerns have been different to that of the UK, but now the ECB
has to move and adapt a lot faster," said Howard Wheeldon,
strategist at BGC Partners.
                                
 Banks were the top gainers on the index ahead of results due
later today on the U.S. bank stress tests. Regulators have
already told Bank of America <BAC.N> it needs $34 billion,
Citigroup $5 billion and Wells Fargo $15 billion.
[ID:nN06286741]
                                
 "What you have got in the market is increasing optimism. We
have the bank stress tests results today which have seemed to
have been leaked ... It is not so much that it is good news, but
the market wants to believe it is final news and it is a
manageable thing," said Bernard McAlinden, market strategist at
NCB Stockbrokers.
                                
 Barclays <BARC.L> was up 2.7 percent after it said its
first-quarter profit rose 15 percent from a year ago as strong
growth at its investment bank arm made up for a big jump in bad
debts. [ID:nL7204458]
                                
 But Societe Generale <SOGN.PA> slumped 6.2 percent after it
announced a surprise first-quarter loss as higher-than-expected
write-downs and provisions hit earnings. [ID:nL6995599]
                                
 Part-nationalised British lender Lloyds Banking Group
<LLOY.L> slipped 7.7 percent after it said bad debts on
corporate loans were rising significantly as the economy
deteriorates and it reiterated it expected to make a loss in
2009. [ID:nL7349308]
                                
 Food producers were higher as consumer goods group Unilever
<ULVR.L> gained nearly 8 percent after first quarter underlying
sales beat forecasts.
                                
 
                                
 SWISS RE, AXA RISE AFTER RESULTS, ZURICH SLIPS
                                
 Swiss Reinsurance <RUKN.VX>, the world's second largest
reinsurer, soared 9.4 percent after the group posted a net
profit of 150 million Swiss francs, beating forecasts, but said
it was raising its mid-term financial targets due to the
volative market conditions. [ID:nL6484808]
                                
 French insurer AXA <AXAF.PA> ticked up 3.1 percent after it
posted a 2 percent fall in first-quarter revenue but said it
expected to have the "flexibility and strength" to face the
global economic recession. [ID:nL632361]
                                
 But Swiss insurer Zurich Financial Services <ZURN.VX> fell
2.5 percent after it posted a 75 percent drop in first-quarter
net profit, falling well short of expectations after the group
suffered $1 billion in realised losses and impairments.
                                
 Energy groups were higher as crude <CLc1> rose 1.2 percent.
BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total
<TOTF.PA> were up 1.2-1.9 percent.
                                
 Miners ticked up on the back of a bullish Barclays note.
Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>,  Rio Tinto <RIO.L> and Xstrata <XTA.L> gained 2.2-3.6
percent.
                                
 However, India-focused mining group Vedanta Resources
<VED.L> slipped 2 percent after it posted a 75 percent drop in
attributable profit after commodity prices slid, but the
London-listed firm kept its final dividend unchanged.
[ID:nL6976074]
                                
 Rexam <REX.L>, the world's biggest maker of drinks cans,
fell 2.8 percent after it said organic first-quarter performance
was weaker but currency effects meant underlying operating
profit was broadly in line with last year.
[ID:nL7100878]
                                
 Across Europe, the FTSE 100 <.FTSE> index was up 1.8
percent, Germany's DAX <.GDAXI> was 1.3 percent higher and
France's CAC 40 <.FCHI> gained 1.2 percent.
 (Editing by Greg Mahlich)