Energy and banking stocks boost European shares, M&S slumps

(ADVISORY – Reuters plans to replace intra-day European and UK
stock market reports with a Live Markets blog on Eikon – see cpurl://apps.cp./cms/?pageId=livemarkets
for site in development. See the bottom of the report for more
details)

* FTSEurofirst 300 index gains 0.9 pct

* Energy shares mirror higher crude oil

* M&S slumps after short-term profit warning

By Atul Prakash

LONDON, May 25 European equities climbed to a
four-week high on Wednesday, with energy shares rising on the
back of a rally in oil and Greek banks gaining after politicians
made progress on talks over securing a debt relief deal.

However, British retailer Marks & Spencer slumped
after saying that its turnaround plan would hit profits in the
short term.

The FTSEurofirst 300 was up 0.9 percent by 0816
GMT, having hit its highest level since late April and adding to
the previous session’s jump of more than 2 percent. The STOXX
Europe 600 index was also up 0.9 percent.

Energy shares were in demand after oil prices pushed closer
to $50 a barrel, with U.S. crude hitting its highest in more
than seven months after industry data suggested a
larger-than-expected drawdown in U.S. crude inventories last
week.

The STOXX Europe 600 Oil and Gas index rose 1.5
percent, helped by a gain of 3.5 percent and 1.1 percent
respectively in BP and Royal Dutch Shell.

Greek shares rose 1.3 percent after euro zone finance
ministers agreed with Greece and the International Monetary Fund
on a deal that will address Athens’ requests for debt relief.

“The agreement should ensure that Greece remains little
source of negative headline risk throughout the rest of the year
… the big question over the next 12 months is how quickly
capital controls can be lifted and the economy can gradually
return towards a path to normality,” Deutsche Bank analysts said
in a note.

Greek banks were up about 1 percent, while the
European banking index rose 2 percent. Shares in Alpha
Bank, Eurobank Erasias, Caxiabank
and Deutsche Bank rose between 1.8 percent and 4.4
percent.

Among standout losers, Marks & Spencer slumped 7.8 percent,
the top decliner in the FTSEurofirst 300 index, after the
company told investors to expect a short-term hit to profit as
it pushes through a plan to turn around its underperforming
clothing and homeware business.

“Clothing and general merchandise performance remains
unsatisfactory as difficult trading conditions persist, which
leaves everything on the shoulders of a stronger performing but
much lower-margin food segment,” Accendo Markets head of
research, Mike van Dulken, said.

“A troubled retail division has become a major issue as the
core customer base ages and it likely struggles to entice a
younger demographic more likely to buy online.”

Today’s European research round-up

ADVISORY – Reuters plans to replace intra-day European and
UK stock market reports with a Live Markets blog on Eikon (see cpurl://apps.cp./cms/?pageId=livemarkets
for site in development). In a real-time, multimedia format
from 0600 London time through the 1630 closing bell, it will
include the best of our market reporting, Stocks Buzz service,
Eikon graphics, Reuters pictures, eye-catching research and
market zeitgeist. Breaking news and dramatic market moves will
continue to be alerted to all clients and we will continue to
provide a short opening story and comprehensive closing reports.

If you have any thoughts, suggestions or feedback on this,
please email mike.dolan@thomsonreuters.com.

Mike Dolan, Markets Editor EMEA.

(Editing by Louise Ireland)

This article is automatically posted by WP-AutoPost Plugin

Source URL:http://www.reuters.com/article/europe-stocks-idUSL5N18M1M9

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