By Ana Nicolaci da Costa
LONDON, March 27 (Reuters) - European stocks rose on
Thursday, as banks found comfort in comments by the European
Central Bank that it would add extra liquidity as needed, while
heavyweight oil stocks tracked crude prices higher.
Strong results propelled retailer Hennes & Mauritz <HMb.ST>,
insurer Swiss Life <SLHN.VX> and Austrian bank Raiffeisen
<RIBH.VI>, while German property lender Hypo Real Estate
<HRXG.DE> soared on relief over its exposure to monoline
insurers.
At 0959 GMT, the FTSEurofirst 300 index <> was up 1.1
percent at 1,272.15 points, with banks the top-weighted gainers.
The ECB said it was keeping an eye on tensions in money
markets and was ready to add extra liquidity as needed.
And the Bank of England said it would offer 13.62 billion
pounds at its regular one-week open-market operation, up from
10.93 billion pounds a week ago.
HSBC <HSBA.L> was up 1.8 percent, Barclays <BARC.L> gained
2.6 percent, HBOS <HBOS.L> was up 3 percent and UBS <UBSN.VX>
rose 2.9 percent.
H&M was among the best-performing stocks, up 4.7 percent ,
after the Swedish group beat market expectations with a near 20
percent jump in first-quarter pretax profit.
"We are not seeing a dramatic impact on the non-financial
sector yet, outside the U.S., from current woes. If that
continues to be the case, then investors will begin to pay for
the earnings that they see developing," said John Haynes,
strategist at Rensburg Sheppard Investment Management.
"But at the moment everybody is a bit too nervous to trust
that the current consensus forecasts are accurate because they
fear that they will be coming down shortly as the financial
issues spill over into them.
Shares in software maker SAP <SAPG.DE> were down 4.2 percent
after U.S. peer Oracle <ORCL.O> said its customers had become
more cautious, dealing a blow to the idea that software
companies would be immune to the turmoil rocking markets.
Heavyweight oil stocks rose after U.S. crude oil futures
jumped more than $1 due to an oil pipeline explosion in Iraq. BP
<BP.L> was up 1.1 percent, Royal Dutch Shell gained <RDSa.L> 0.9
percent ant Total <TOTF.PA> put on 1.1 percent.
FINANCIALS REBOUND
Austrian bank Raiffeisen International jumped nearly 4.2
percent after beating forecasts with a 38 percent rise in
fourth-quarter net profit.
Swiss Life rose nearly 5 percent after its results beat
expectations and the company promised shareholders a fat payout
after trimming its business through a spate of divestments.
And Hypo Real Estate <HRXG.DE>, Germany's second-largest
property lender, jumped more than 8 percent after falling at the
opening when it said it might not meet 2008 earnings targets.
Traders attributed the rise, coming after more than 60
percent of losses since mid-January when it announced its
subprime writedown, to Hypo Real Estate's lower-than-expected
monoline exposure.
Financial stocks have come under pressure from ongoing
writedowns in the banking sector related to a credit crisis
which originated in the risky U.S. subprime mortgage market.
Major central banks have tried to limit its impact on the
market by leaning towards easier monetary policy and opting for
cash injections to boost ailing money markets.
Also underpinning sentiment, the GfK research survey showed
German consumer morale is set to improve slightly in April but
the threat of persistently high inflation may discourage
spending in coming months.
(Additional Reporting by Blaise Robinson; Editing by Quentin
Bryar)
