Novartis helps European shares edge up after buyback

Friday, 22 Nov 2013 | 3:10 AM ET

LONDON, Nov 22 (Reuters) - European shares opened higher on Friday, lifted by Swiss drugmaker Novartis after a $5 billion share buyback announcement, with sentiment also supported by rallies in U.S. and Japanese shares overnight.

Shares in Novartis rose 1.3 percent after the company said it would allocate capital to a strong and growing dividend, bolt on buys and a $5 billion share buyback to take place over two years.

They were the single largest contributor to the FTSEurofirst 300 index, which was up 0.2 percent at 1,298.67 points at 0806 GMT.

The U.S. Dow Jones index closed above the psychologically key 16,000 points level for the first time on Thursday and Japanese stocks scaled six-month peaks after U.S. economic data pointed to a slowly improving labour market and subdued inflation.

Adding to the positive market sentiment, James Bullard, president of the Federal Reserve Bank of St. Louis and a voting member of the FOMC, said late on Thursday that the inflation data gives the central bank some leeway to keep the accommodative policy, which has helped European equities rise nearly 20 percent since September 2012.

With no major European or U.S. companies due to report on Friday, investors were likely to focus on Germany's Ifo business morale index, due to be published at 0900 GMT and expected to rise to 107.7 points after a fall in the previous month.

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