* FTSEurofirst 300 up 1.2 percent
* US, China data boosts demand for equities
* Banks bounce as broker upgrades lift sector
* Getinge knocked by profit concerns
By David Brett
LONDON, Feb 8 (Reuters) - A return to form by Europe's banks
helped the continent's shares recover on Friday with data
pointing to potentially stronger global growth driving demand
The FTSEurofirst 300 closed up 13.82 points, or 1.2
percent, at 1,162.10.
A narrowing trade deficit in the U.S. and data overnight
showing growing demand for Chinese exports nurtured hope that
the global economy will strengthen.
Meanwhile, European Union leaders ended a bout of
uncertainty by reaching an agreement on the bloc's long-term
spending plans after more than 24 hours of negotiations.
"The key drivers for the macro recovery in January and the
subsequent equity rally appear to be holding and as a result we
have seen a lot of the week's pullback eradicated," Adam
Seagrave, equity Trader at Saxo Bank, said.
The euro zone blue chip index rose 1.3 percent, finding
support around its 200-week moving average (MA) at 2,616. The
index has not closed below its 200-week MA since mid-December.
The brightening outlook for the global economy helped lift
demand for miners, which rose 1 percent, but it was the
banks, up 2.8 percent, which were the main drivers.
French bank Credit Agricole gained 6.9 percent
after brokerage Exane upgrades it to "outperform," citing the
significant discount it trades at relative to peers.
Norwegian bank DNB rose 4.6 percent, building on a
7 percent gain in the previous session after having delivered on
its dividend promise, after UBS, Nomura and Credit Suisse
produced upgrades on the stock.
The sector as a whole regained most of the losses of the
last four days but found resistance around it 14-day moving
average of 175.75.
While the broader FTSEurofirst 300 finished the session
strongly, the index fell for the second week in succession,
edging further away from 2-year highs which is proving a tough
"On a personal level if you are the man on the street would
you looking to be buying into this move? It is a tough decision
but if you believe in the macro data that we are seeing then
things care coming together which will aid the recovery
further," a London-based trader said.
Improving global data could help companies keep up with
their recent reratings, which in terms of price-to-earnings
ration (PE) of 12 times are now at post credit crises highs.
Heavyweight mobile telecoms firm Vodafone climbed
1.2 percent after BofA Merrill Lynch upgraded the company to
"buy" from "neutral" noting consensus earnings downgrades are
slowing and could potentially of a merger or takeover in the
With PEs at mutli-year highs companies are under pressure to
56 percent of companies in Europe have so far met or beaten
earnings expectations in the fourth-quarter, although
year-on-year fourth-quarter earnings have contracted 22.5
percent, according to Thomson Reuters (TRS) data.
Those corporate which disappoint at the earnings level
continue to be punished by the market. Those that have missed
earnings expectation have underperformed by an average of 2
percent, according to TRS data.
Swedish medical technology group Getinge shed 4.8
percent after it pushed back its profit margin target by one to
Imperial Tobacco fell 2 percent after Investec cut
its rating to "hold" from "buy" on worries profits could be
squeezed as planned cost optimisation looks challenging when the
company starts with some of the best margins in the industry.
"We don't think a take-out is imminent enough and while
Imperial Tobacco looks 'cheap', it doesn't look that cheap in
the current Darwinian climate," Investec said in a note.