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European Stocks Close Up, Helped by U.S. Rally

CNBC.com
Wednesday, 29 Aug 2007 | 12:18 PM ET

European stocks closed mainly in positive territory, helped by a morning rally in the U.S.

The London FTSE-100and Paris CAC-40posted the biggest gains, advancing by 0.4% and 0.7% respectively, while the Frankfurt DAX was nearly flat.

European spirits were also lifted by the trading on the U.S. market, where stocks rose sharply because of heavy buying of industrial and technology companies' shares.

Positive momentum seemed tentative, however, as markets are still nervous ahead of the European Central Bank's decision next week on whether it would postpone raising its key rate because of the recent turmoil.

Financials took another battering when the tight credit market forced London hedge fund Cheyne Capital to begin unwinding a structured investment vehicle worth $6.6 billion due to a breach of funding restrictions,according to a FT report.

However, shares in U.K. bank Barclays were nearly 2% higher after a report citing unnamed sources said its losses because of exposure to highly leveraged debt vehicle would be limited to $150 million, compared to several hundred millions quoted in a Tuesday report.

French hotels group Accor beat profit expectations with a 34% rise in profit, sending its shares nearly 6% higher, while miner Antofagasta said its first-half profit gained 8.4%. Its shares closed 1.24% higher in London trading.

Nokia's shares jumped 4.62% after the world's largest cell phone maker unveiled an online music store, a gaming service and four new multimedia handsets in a move to take a greater share of consumer spending from mobile operators.

Dutch beer maker Heineken said operating profit for the first half rose 24.8% as emerging market sales boosted results, but its shares fell 0.9% as it warned of higher input costs to come.

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