* FTSEurofirst 300 index ends up 0.5 percent
* U.S. June new home sales post largest pct jump in 30 years
* Banks gain; GlaxoSmithKline falls on Genzyme talk
By Joanne Frearson
LONDON, July 26 (Reuters) - European shares hit a five-week
closing high on Monday, helped by strong U.S. new home sales and
banks basking in the glow of their stress test results published
late last week.
Among banking stocks, Allied Irish Banks <ALBK.I>, Barclays
<BARC.L>, Dexia <DEXI.BR> and Societe Generale <SOGN.PA> gained
4.5 to 9.1 percent.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.5 percent higher at 1,049.01 points.
The Euro STOXX 50 index <>, the euro zone's
blue-chip index, was 0.9 percent higher at 2,743.12 points,
closing above the 50 percent Fibonacci retracement of 2,737.62
points from its high in April to a low in May for the first time
in five weeks.
"The U.S. new home sales were quite good," said Stephen
Pope, chief global equity strategist at Cantor Fitzgerald. "But
volume is low. We are in the middle of earnings season, and
investors are still waiting to see what happens."
Sales of new U.S. single-family homes rebounded strongly in
June from the prior month's record low, government data showed
on Monday, driving the number of houses on the market to their
lowest level in nearly 42 years. []
Oil major BP <BP.L> gained 4.6 percent, with the company
expected imminently to announce that Bob Dudley, an American,
would replace CEO Tony Hayward, who has come under fire for his
gaffe-prone handling of the worst oil spill in U.S. history.
[]
Tullow Oil <TLW.L> rose 5.1 percent after the oil explorer
said it had found a major new field off the coast of Ghana,
raising hopes of further discoveries off West Africa.
Elsewhere, Pearson <PSON.L> advanced 5.8 percent after the
educational technology provider and Financial Times owner firmed
up its full-year outlook after a strong first-half showing from
all its units. []
GLAXOSMITHKLINE DIPS
Drugmakers were the worst performers, with Britain's
GlaxoSmithKline <GSK.L> dipping 1.3 percent after The Wall
Street Journal said it had recently made "a very casual
approach" to Genzyme Corp <GENZ.O>.
Industry insiders and analysts, however, said France's
Sanofi-Aventis <SASY.PA> was a more likely buyer for Genzyme.
Sanofi stock gained 0.2 percent, helped by the company sticking
to its 2013 guidance, despite the U.S. launch of a generic rival
to its Lovenox drug.
On the downside, telecoms equipment maker Ericsson
<ERICb.ST> slipped 1.9 percent after UBS removed its short-term
"buy" rating after Friday's second-quarter results and cut its
price target to 83 crowns from 85.
Across Europe, the FTSE 100 <> index was up 0.7
percent, a 10-week closing high. Germany's DAX <> gained
0.5 percent and France's CAC 40 <> rose 0.8 percent.
The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> gained 2 percent.
(Reporting by Joanne Frearson, editing by Will Waterman)
