European Markets Rebound on Retailers and Banks (MarketWatch) (17-01-2008)

LONDON (MarketWatch) -- European shares rallied significantly on Thursday morning, as updates from retailers such as Kesa Electricals and Delhaize encouraged investors to return to these sectors recently hurt due to fears of the economic outlook.

The pan-European Dow Jones Stoxx 600 index moved up 1.4% to 337.57, with retailers, technology firms and banks among the strongest advancers.

 Retailers included consumer-electronics retailer Kesa Electricals, up 7.8%, Belgian-U.S. supermarket owner Delhaize, up 4%, and U.K. books and music store chain HMV Group, which shot up 14.9%. All of these firms updated investors on trading early on Thursday, with Kesa posting a 14.3% rise in sales in just over two months, Delhaize organic sales up 5.5% in the fourth quarter of 2007 and HMV five-week sales up 9.9%.

Of national indexes, the U.K. FTSE 100 index moved firmly back over the key 6,000 level, up 1.3% to 6,023.10, while the German DAX 30 index rose 0.9% to 7,537.61 and the French CAC-40 index advanced 1% to 5,275.86.

The gains follow a turbulent week for European stocks, which are on track to record their worst January performance ever amid growing dismay over global economic prospects.

Banks also regained a bit of popularity on Thursday, with UBS shares up 2.7%, Deutsche Bank shares up 1.4% and Fortis shares up 3.1%.

Alstom was another notable gainer, up 6.5% after it posted above-consensus third-quarter sales of 4.1 billion Euros, up from 3.4 billion Euros last year.

The French industrial power and rail transport group said that its total order backlog hit 40.6 billion Euros at the end of December.

However, shares of drug firm Novartis moved down 3.6%.

The Swiss drug maker said that fourth quarter net profit from continuing operations fell 42% to $931 million, dropping below analyst forecasts for profit of $1.33 billion.

U.S. pharmaceutical sales fell 21% in the quarter due to generic competition for four products - Lotrel, Lamisil, Trileptal and Famvir - and the suspension of Zelnorm, the firm said.

Source: Marketwatch