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European Stocks End Higher as Banks Gain

Reuters
Friday, 30 Nov 2007 | 12:10 PM ET

European equities rose for the third straight day on Friday as banks took pole position on rising prospects of cuts in U.S. interest rates, but markets still ended with their worst monthly performance since May 2006.

HSBC, Barclays, and UBS all gained between 2.0 and 4.3 percent. Miners Anglo American and Xstrata jumped on persistent consolidation talk and a rise in metal prices.

Dutch staffing firm Vedior surged 38 percent on news bigger rival Randstad is in talks to buy it.

The pan-European FTSEurofirst 300 index advanced 1.2 percent to an unofficial close of 1,526.5, its highest finish since Nov 14. Global equities also jumped on Friday.

Recent gains have helped the FTSEurofirst index gain 6 percent from a three-month low hit last week.

The benchmark has however lost about 4 percent in November, it's worst performance since May when it fell more than 5 percent, on intensifying credit worries.

"It may sound bold at this point but, even though the lack of clarity makes it risky to reinvest in the banking sector, these stocks have started to look attractive again," said Christian Desbois, managing director at UFG Investment Managers.

U.S. short-term interest rate futures now fully price a 25 basis point rate cut on Dec 11 and as much as a 42 percent chance the Fed could slash rates by 50 basis points instead, up from just 6 percent on Wednesday.

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