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Friday April 13, 4:46 PMEuropean shares head higher on oils, PPI eyedPARIS, April 13 (Reuters) - European shares rebounded from a one-week low early on Friday, as a sharp rise in oil prices fuelled gains in heavily-weighted energy stocks, but lingering worries about inflation capped the market's advance.Takeover activity once again spurred selected stocks such as Faurecia as traders cited rumours that Peugeot was mulling a spin-off the French car-parts maker. Peugeot said its policy of remaining a majority shareholder in Faurecia was unchanged and added it saw no reason for a 3-percent rise in its share price except for European car sales figures which showed they gained market share in March. The FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,548.33 points by 0935 GMT, with BP and Royal Dutch Shell among the region's biggest gainers as oil prices topped $64 a barrel. But the latest rise in crude prices also added to concern about inflationary pressures and their impact on monetary policy on both sides of the Atlantic. Therefore, and with a relatively subdued corporate earnings agenda, interest rate-wary investors awaited the publication of U.S. producer prices at 1230 GMT, which economists expected to show a 0.7 percent rise in March -- and a 0.2 percent increase forecast for prices excluding food and energy. "In spite of clear signs of slower economic growth, stickiness in inflation will keep the market, and us, waiting on the Fed," Merrill Lynch economist David Rosenberg said. "Not only does the core inflation rate, as measured by either the core CPI or the Fed's preferred measure, the core PCE price index, remain above the Fed's putative comfort zone of 1-2 percent, the recent monthly prints have moved in the wrong direction - up instead of down." Around Europe, London's FTSE 100 index added 0.2 percent and Paris's CAC 40 gained 0.4 percent, while Frankfurt's DAX and the Swiss Market Index in Zurich were both 0.5 percent firmer. Other market gainers included SAP , up 3.6 percent after Merrill Lynch reiterated a "buy" rating on the stock, while Barclays climbed nearly 2 percent on talk it was pulling out of a proposed merger with ABN AMRO and that JPMorgan was interested in bidding for the UK bank. Pharmaceuticals added to market gains, with GlaxoSmithKline and AstraZeneca up between 1.3 and 1.7 percent, while Switzerland's Novartis rose 1.1 percent after U.S. government researchers said its cancer drug Gleevec reduced by 70 percent the risk that a kind of stomach cancer called gastrointestinal stromal tumor would come back after surgery. |
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