* FTSEurofirst 300 index up 0.4 percent
* Concerns over Fed tightening retreat
* Shire gains after forecasting return to growth in 2010
* Thales slumps on lower orders forecasts
By Harpreet Bhal
LONDON, Feb 19 (Reuters) - European shares hit a three-week
closing high on Friday, rising for the fifth straight session,
as policymakers and economic data calmed speculation that the
U.S. central bank could retreat from its easy money policy.
The FTSEurofirst 300 <> index of top European shares
closed 0.4 percent higher at 1,026.05 points, the highest
closing level since Feb. 2. The index has risen 4 percent this
week, its best weekly gain since late July 2009.
The U.S. Federal Reserve raised the discount rate to 0.75
percent from 0.5 percent, but officials moved to calm
speculation that a surprise rise in its emergency lending rate
could bring forward broader policy tightening, saying borrowing
costs in the economy would stay low. []
European banks recovered some earlier losses, with Barclays
<BARC.L>, HSBC <HSBA.L>, Societe Generale <SOGN.PA>, BNP Paribas
<BNPP.PA> and Deutsche Bank <DBKGn.DE> up 1.3 to 1.9 percent.
Data showed U.S. consumer prices rose less than expected in
January, supporting the Fed's contention it would keep its
benchmark interest rate low. []
"The inflation numbers came in not as high as people were
expecting so there is less chances of the economy overheating
quickly," said Arifa Sheikh-Usmani, equity trader at Spreadex.
Food producers were strong, led higher by a 2.4 percent rise
in Nestle <NESN.VX> after it said it is aiming for higher
underlying sales growth in 2010 after a robust performance in
Asia and the Americas helped it beat forecasts for 2009.
[]
Within the sector, Danone <DANO.PA>, Associated British
Foods <ABF.L> and Unilever <ULVR.L> rose 1 to 2.7 percent.
Shire <SHP.L> led drugmakers higher, rising 4.6 percent
after it forecast a return to revenue and earnings growth in
2010 after reporting better than expected 2009 results.
[]
AstraZeneca <AZN.L>, Sanofi-Aventis <SASY.PA> and Novartis
<NOVN.VX> rose 0.5 to 1.5 percent.
Across Europe the FTSE 100 <>, Germany's DAX <>
and France's CAC 40 <> rose 0.6 to 0.7 percent.
MINERS WEAK
Miners fell, weighed by lower metals prices, as the dollar
touched an eight-month high against a basket of currencies after
the Fed's decision to raise its discount rate.
Eurasian Natural Resources <ENRC.L>, Kazakhmys <KAZ.L> Rio
Tinto <RIO.L> and Vedanta Resources <VED.L> shed 0.2 to 1.1
percent, while Anglo American <AAL.L> lost 1.8 percent after it
didn't reinstate a dividend following annual results.
[]
Among individual movers, French defence electronics company
Thales <TCFP.PA> slumped 12.1 percent after it forecast lower
new orders in 2010 and said it plunged into the red last year
due to writedowns for money-losing deals. []
Carrefour <CARR.PA> lost 2 percent after posting a plunge in
profits due to asset writedowns and a weak performance in
France, and expects a tough 2010
On the macroeconomic front, the euro zone's manufacturing
sector had its best month in 2-1/2 years in February helped by
German strength but the dominant service sector expanded at a
slower pace than expected, the Markit's Flash Purchasing
Managers' Index Composite index showed. []
