* FTSEurofirst 300 rises 0.1 pct; highest close since May 3
* Southern Europe stocks hit by worries on fiscal austerity
* Banks fall as U.S. authorities expand probe
* For up-to-the-minute market news, click on []
By Harpreet Bhal
LONDON, May 13 (Reuters) - European shares edged up on
Thursday as strong earnings from BT <BT.L> and Sainsbury
<SBRY.L> offset rising concerns that fiscal tightening in Europe
could result in a slowdown in the region's growth.
The FTSEurofirst 300 <> index of top European shares
closed 0.1 percent higher at 1,049.89 points, its highest
closing level in more than a week in a volatile session where
the index swung between positive and negative territory.
The index, which rose 1.3 percent on Wednesday, has soared
8.5 percent so far this week, on track to post its biggest
weekly surge since November 2008, lifted by the massive bailout
unveiled at the weekend to tackle the euro zone debt crisis.
Portuguese leaders agreed tough new austerity measures,
joining a coordinated euro zone push that has so far calmed the
markets' worst fears of a Greek-style debt crisis spreading. But
concerns that the measures could harm growth hurt investor
sentiment. []
Across Europe, Britain's FTSE 100 <> rose 0.9 percent
and Germany's DAX <> added 1.1 percent, but France's CAC
40 <> fell 0.06 percent, Spain's IBEX <> dropped 1.1
percent, Italy's MIB <.FTMIB> shed 0.7 percent and Portugal's
PSI 20 <> lost 0.8 percent.
"It's a positive sign that European economies are starting
to act to bring their deficits under control. It's a tough
balancing act and they can't put recovery efforts under threat,"
said Joshua Raymond, market strategist at City Index.
"Sentiment is swaying one way or another every single day
and that's why we are seeing choppy trading sessions."
Banks were among the biggest sector fallers, with the STOXX
Europe 600 banking index <.SX7P> down 0.7 percent.
New York Attorney General Andrew Cuomo's office on Wednesday
served subpoenas on four U.S. banks and four European lenders on
part mortgage security deals, a source said, targeting Credit
Agricole <CAGR.PA>, Credit Suisse <CSGN.VX>, Deutsche Bank
<DBKGn.DE> and UBS <UBSN.VX> [].
Among the gainers, BT Group jumped 10.9 percent after the
telecoms carrier's full-year results beat market expectations.
J Sainsbury rose 3.2 percent as Britain's No.3 grocer beat
forecasts with an 18 percent rise in full-year profit, but said
it expected a tough 2010 with little or no food price inflation
and consumers hit by higher taxes. []
Vallourec <VLLP.PA> rose 6.3 percent. The seamless tube
maker said after markets closed on Wednesday that quarterly
sales slumped by a third but gave a slightly rosier first half
outlook. []
SAP AG <SAPG.DE> fell 1.1 percent after the German software
company offered to buy smaller U.S. rival Sybase Inc <SY.N> for
$5.8 billion. []
Telefonica <TEF.MC> fell 1.9 percent after posting
lower-than-expected first-quarter results. []
Across the Atlantic, the number of U.S. workers filing for
jobless benefits fell only slightly last week, highlighting the
challenges facing the labour market, while import prices pointed
to tame inflation, according to government data. []
Markets in Austria, Denmark, Finland, Norway, Sweden and
Switzerland were closed for Ascension Day.
(Editing by David Cowell)
