* FTSEurofirst 300 up 1 percent to seven-week closing high
* China's currency move boosts appetite for risky assets
* Commodity, banking shares among top gainers; BP slips
By Atul Prakash
LONDON, June 21 (Reuters) - European shares rose for a ninth
straight session on Monday to a seven-week closing high as
China's move to allow a flexible yuan raised hopes for a
recovery in the global economy and boosted demand outlook for
commodities.
Mining and energy shares were among the top gainers, taking
strength from firmer metal and oil prices which climbed on
expectations a stronger Chinese currency would lift purchasing
power for foreign goods in the world's third-biggest economy.
The FTSEurofirst 300 <> index of top European shares
ended 1 percent firmer at 1,055.38 points, the highest close
since early May. It is up more than 7 percent in nine sessions,
but is up just 0.8 percent for the year as worries about debt
levels in the euro zone hurt sentiment in April and May.
The yuan surged on Monday by the most of any day since its
landmark revaluation in 2005 after the country's central bank
announced over the weekend that it would allow more flexibility
for the currency. []
"This can be viewed as a vote of confidence by the Chinese
officials in the strength and the resilience of the Chinese
economy and that is being taken as positive," said Klaus Wiener,
head of research at Generali Investments.
"We had a nine-day spell of good performance. We may see a
setback at some point, but on balance, we will see a slightly
positive drift in equity markets for 2010."
Equities across the world rose on expectations that China's
move would ease political tensions with the West and encourage
investors to snap up riskier assets. A higher yuan would also
help temper inflation in the country, which could mean Beijing
would have less need to tighten monetary policy aggressively.
"It is a powerful story for equity markets," said Mike
Lenhoff, chief strategist at Brewin Dolphin.
"China's readiness for further exchange rate reform is just
what is needed. Together with interest rates on hold at the
major central banks, it provides another means of reflation for
the global economy."
Among miners, BHP Billiton <BLT.L>, Rio Tinto <RIO.L> and
Vedanta <VED.L> gained 4.7 to 6 percent, while oil companies
Royal Dutch Shell <RDSa.L>, Repsol <REP.MC> and Tullow Oil
<TLW.L> added 1.4 to 2.3 percent.
"It's totally on the back of China, and miners are the best
performers, which shows you where the drive in the markets is
coming from. We're also seeing generic higher appetite for
risk," said Joshua Raymond, market strategist at City Index.
But BP <BP.L> fell 2.2 percent. An internal BP document
released by a U.S. lawmaker estimated a worst-case scenario rate
for the Gulf of Mexico oil spill could be about 100,000 barrels
per day, far higher than the current U.S. figure.
OIL SERVICES GAIN
Shares in European oil services firms got a boost from news
that Oslo-listed oilfield services provider Acergy <ACY.OL> has
agreed to buy rival Subsea 7 <SUB.OL> in an all-share deal set
to create a leader in undersea engineering.
Subsea and Acergy rose 9.1 and 9.6 percent respectively,
while France's Technip <TECF.PA> gained 5.5 percent.
Investors' appetite for risky assets also helped banks, with
the STOXX Europe 600 banking index <.SX7P> rising 0.8 percent.
Standard Chartered <STAN.L>, HSBC <HSBA.L>, Barclays <BARC.L>
and Societe Generale <SOGN.PA> rose 1.5 to 1.7 percent.
Among individual shares, Swatch Group <UHR.VX> and Richemont
<CFR.VX> gained 5.4 percent and 4.1 percent respectively as
investors expected the watchmakers to benefit from stronger
sales in China after the currency move.
Across Europe, the FTSE 100 <>, Germany's DAX <>
and France's CAC 40 <> gained between 0.9 and 1.3 percent.
The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> rose 0.7 percent.
(Additional reporting by Brian Gorman; Editing by David Cowell)
