By Amanda Cooper
LONDON, May 7 (Reuters) - European shares edged up in early
trade on Wednesday after a flurry of results that pushed up
shares in French cement maker Lafarge <LAFP.PA>, but weighed on
insurers Aegon <AEGN.AS> and Axa <AXAF.PA>.
Lafarge shares were the biggest percentage gainers on the
European market, rising by more than 6 percent after the world's
largest cement maker beat forecasts with a 48-percent rise in
first-quarter operating profit.
British American Tobacco shares rose by nearly 3 percent
after the company posted a 17 percent rise in first-quarter
earnings.
By 0828 GMT the FTSEurofirst 300 index <> of top
European shares was up 0.2 percent at 1,353.72 points, with
advancing issues outnumbering decliners by two to one.
Analysts warned about excessive optimism over earnings as
the outlook for the global economy was still fairly opaque, the
credit crisis was still a long way from being solved and the oil
price <CLc1> was at record highs above $122 a barrel.
"Whatever results come out are not going to make any sense
in the next quarter because people have to reset their
expectations lower...that has to then be reflected in the
prices," said Justin Urquhart Stewart, investment director at
Seven Investment Management.
Aegon shares were among the largest drags on the index,
falling 1.1 percent after the company posted a 78-percent drop
in first-quarter net profit.
"The underlying life profit was in line with expectations.
However the new sales and new value of the sales and investment
result was lower than we expected," said analysts at Rabobank in
a note.
Axa fell 1.4 percent after Europe's biggest insurer said
first-quarter group sales fell 2.7 percent and turnover was hurt
by adverse foreign exchange rates and the credit crisis.
Banks were among the worst performing sectors, led by UBS
<UBSN.VX>, Societe Generale <SOGN.PA> and UniCredit <CRDI.MI>,
which were all down between 1 and 2 percent.
Ratings agency Moody's on Tuesday cut its outlook for
UniCredit debt to "negative" from "stable" after the Italian
bank unveiled writedowns last month.
Commerzbank <CBKG.DE>, which warned its profit target for
the year was drifting out of reach after unveiling 244 million
euros' worth ($377.9 million) in writedowns, rose by more than 1
percent.
German-based traders pointed to the results from the group's
trading division and analysts said the overall results were
roughly in line with expectations.
Shares in Germany's Henkel <HNKG_p.DE> were up 4.4 percent
after the cosmetics and detergents group's results beat
forecasts, making it one of the top percentage gainers on
Germany's DAX index <>.
European shares were also underpinned by a rally on Wall
Street the day before, where some concern over the outlook for
the housing and credit markets was relieved by housing finance
company Fannie Mae <FNM.N> saying the worst of the credit
turmoil may have passed.
Around Europe, London's FTSE 100 <> rose 0.4 percent,
while Frankfurt's DAX <> gained 0.5 percent and Paris' CAC
40 <> rose 0.2 percent.
The rise in the price of crude oil <CLc1> above $122 a
barrel helped push up shares in oil and gas majors such as BP
<BP.L> and Royal Dutch Shell <RDSa.AS> by 0.8 and 0.2 percent,
respectively.
French oil company Total was the largest individual negative
weight, falling 1.6 percent after it posted a 9-percent rise in
first-quarter net profit but would not commit to a production
target.
Later in the day, investors will look out for U.S. data on
first-quarter unit labour costs and productivity as well as
pending home sales data for March.
(Editing by Stephen Weeks)
