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European Stocks Close Higher After US Homes Data

CNBC.com
Thursday, 25 Oct 2007 | 12:01 PM ET

European stock indexes closed firmly higher after a broadly positive session Thursday, with only a dip mid-session after weak U.S. jobless claims and durable goods data.

The prospects of an imminent interest rate cut from the Federal Reserve kept most European shares in the green during the day, and positive momentum returned following unexpectedly good news from the U.S. housing sector.

London's FTSE-100 finished higher by 1.5 percent and the Frankfurt DAX ended 1.3 percent higher.

France Telecom was one of the lead gainers on a positive CAC-40 index after the telecom company posted forecast-beating third-quarter sales and operating profit, boosted by stronger-than-expected sales in the UK and Spain.

Elsewhere in the telecom sector, EricssonChief Financial Officer Karl-Henrik Sundstrom stepped down in the wake of last week's sharp profit warning. The telecom equipment and mobile handset maker confirmed a sharp 36 percent fall in its third-quarter net profit Thursday, which was in line with its warning. Shares were 1.2 percent lower at the close.

In the energy sector, Royal Dutch Shell was slightly lower at the end of trading in Amsterdam after reporting an 8 percent decline in third-quarter profit on falling oil and gas operating margins. But the operating profit beat analysts' expectations.

ABB was the best performer on Switzerland's SMI index on news that after the Swiss engineering company beat forecasts with an 86 percent increase in third-quarter net income. ABB was also bullish on outlook.

Looking to the economy, the German Ifo Institute reported that business sentiment slipped in October as expected, signalling a slow down in Europe's biggest economy.

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