By Blaise Robinson
PARIS, April 28 (Reuters) - European stocks rose for the
fourth straight session on Monday, led by banks on renewed
optimism for the battered sector after reassuring updates from
Spain's BBVA <BBVA.MC> and American Express <AXP.N>.
Energy stocks found support in crude oil prices, which
flirted with the $120 level on worries over supply. Total
<TOTF.PA> rose 0.8 percent and Royal Dutch Shell <RDSa.L> gained
0.6 percent. Mining shares also rallied, along with metal
prices. Xstrata <XTA.L> added 2.4 percent and BHP Billiton
<BLT.L> gained 1.5 percent.
But banks were the biggest positive weight, with Banco
Santander <SAN.MC> up 0.6 percent and Credit Suisse <CSGN.VX> up
1.8 percent. BBVA gained 0.8 percent after posting first-quarter
recurrent net profit up 14.9 percent and in line with analysts'
forecasts.
At 0835 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.4 percent at 1,336.12 points.
After a dismal first quarter, Europe's benchmark index has
gained 5.8 percent so far in April, on track to record its best
monthly performance since October 2003, as stronger corporate
results than expected eased investors' fears about the impact of
a U.S. economic slowdown.
The index is still down 11.3 percent on the year, hit by
fears of U.S. recession and a global credit crisis that forced
banks to make huge asset writedowns and emergency capital
increases.
"We're still seeing a bear market rally and I think it will
be over fairly soon, although this week can be a little bit
positive," said Philippe Gijsels, senior equity strategist at
Fortis Bank, in Brussels.
"This month has been really good for equities, so a lot of
people that are 'underweight' equities will want to participate
in the rally. But the negative trigger could come from the Fed
meeting. With inflation running high, the Fed may be less
inclined to continue cutting rates and become a bit more
hawkish."
The day will be quiet on the macroeconomic front, while
investors brace for an interest rate decision by the U.S.
Federal Reserve on Wednesday and U.S. monthly jobs data due on
Friday.
A majority of economists forecast a 25 basis-point cut by
the Fed, but there is still a chance of no cut, based on fed
funds futures. Not since August has there been any question
whether the Fed would cut rates.
Around Europe, Germany's DAX index <> was up 0.5
percent, Britain's FTSE 100 index <> up 0.4 percent and
France's CAC 40 <> up 0.5 percent.
Whitbread <WTB.L> rose 4 percent after the owner of
Britain's biggest hotel and coffee-shop chains reported a 26.3
percent rise in annual pretax profit and said the start of this
financial year had been encouraging.
UK lender HBOS <HBOS.L> was down 1.6 percent, hit by talk of
a rights issue. The Financial Times reported that HBOS is
finalising plans to tap investors for fresh capital of up to 4
billion pounds in a rights issue to bolster its capital base,
adding that the mortgage lender faced up to 3 billion pounds of
writedowns.
"The financial sector seems to be taking the expected HBOS
rights issue in its stride, as with only Barclays to come, and
even that not certain, this is likely to be amongst the last of
the big calls. Punters are now trying to look through the
current problems to the sunny uplands beyond," Simon Denham,
managing director at Capital Spreads wrote in a note.
"For many, this may appear to be rather premature as most of
the write-offs over the past six months have been nothing to do
with the situation in the UK, but more aligned with investment
problems in the U.S. If, and it is still a big if, there is a
serious mortgage repayment problem in the UK, then the banks may
well find further heavy write-offs are just around the corner."
(Editing by Quentin Bryar)
