* FTSEurofirst 300 ends 1.3 pct higher after 2-day slide
* Greek banks surge 13.1 pct; biggest one-day rise on record
* BP falls 6.5 percent as Gulf oil spill deteriorates
By Atul Prakash
LONDON, April 29 (Reuters) - European shares bounced back on
Thursday after sharp declines in the past two days, with strong
earnings, encouraging macro data and hopes that Greece is closer
to a bailout deal prompting investors to return to equities.
The FTSEurofirst 300 <> index of top European shares
closed 1.3 percent higher at 1,070.06 points after falling 4.2
percent in the past two days as downgrades of Greece, Portugal
and Spain triggered a sell-off on stock markets worldwide.
Financial stocks were among the top gainers, with STOXX
Europe 600 banking index <.SX7P> rising 2.3 percent and Greek
banks <.FTABNK> surging 13.1 percent.
Standard Chartered <STAN.L>, HSBC <HSBA.L>, Barclays
<BARC.L>, Royal Bank of Scotland <RBS.L>, BNP Paribas <BNPP.PA>,
Societe Generale <SOGN.PA>, Credit Agricole <CAGR.PA> and
Natixis <CNAT.PA> were up 0.5 to 2.6 percent.
"Good company figures are helping the market. Underlying
macro-economic data is positive and if you have declining share
prices, then you get good valuations," said Giuseppe-Guido
Amato, strategist at Lang & Schwarz in Frankfurt.
The recent share pullbacks have dragged European stock
valuations to their lowest since Feb. 15. The average
price-to-earnings (P/E) ratio of stocks in the FTSEurofirst 300
is 14.15, against a current P/E ratio of 17.2 percent for Wall
Street's S&P 500 index <.SPX>.
After hitting the market over the past days, fears over the
sovereign debt of Greece, Portugal and Spain somewhat abated.
"Concerns about Greece have eased to some extent, but the
danger is that there could be new negative news from Portugal or
Spain. That (sovereign debt) is a time bomb and nobody knows
when its counter reaches zero," Amato said.
Greece readied severe austerity measures to secure
multi-billion dollar aid. European Union Economic and Monetary
Affairs Commissioner Olli Rehn said the EU should complete talks
with Greece within days. [] []
Portugal's benchmark share index <> rose 4.6 percent,
Greece's index <> was up 7.1 percent and Spain's IBEX
<> gained 2.7 percent. Recently beaten-down Greek banks
National Bank <NBGr.AT>, EFG Eurobank <EFGr.AT> and Alpha Bank
<ACBr.AT> spiked 10.2 percent to 17.65 percent.
"Calls from Germany's leader Angela Merkel to take action
fast seem to be falling on deaf ears as investors are expecting
them to do more than just talk," said Angus Campbell, head of
sales at Capital Spreads.
"Without any credible action plan uncertainty will continue
to shroud the markets and this small bounce may be short-lived."
RISK APPETITE RETURNS
Investor appetite for risky assets returned, with the
VDAX-NEW volatility index <.V1XI> falling 4.2 percent after
spiking 37 percent in the previous two sessions. The lower the
index, the higher the market's desire to take risk.
Strong corporate results helped lift investors' mood, with
Banco Santander <SAN.MC> up 4 percent after the euro zone's
largest bank posted forecast-beating results.
Positive news on the macro side also supported the market.
Data showed euro zone economic sentiment jumped much more than
expected in April despite the Greek crisis. []
But the number of U.S. workers filing new applications for
unemployment insurance fell slightly less than expected last
week, implying only a gradual labour market improvement.
Miners gained on improving economic outlook. BHP Billiton
<BLT.L>, Anglo American <AAL.L>, Antofagasta <ANTO.L>, Xstrata
<XTA.L> and ENRC <ENRC.L> climbed 0.4 to 4.6 percent.
Among individual movers, BP <BP.L> fell 6.5 percent after
the oil major said a leaking well in the Gulf of Mexico was
gushing at five times the rate initially thought. []
Improvements at all of Volkswagen's <VOWG_p.DE> core brands
drove the near-tripling of first-quarter operating profit. Its
shares jumped 5.6 percent.
About 347 million shares changed hands on the FTSEurofirst
300, representing around 142 percent of its 90-day daily average
volume. The average daily volume in 2009 was 253 million shares.
