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Softer Oil, Firmer Banks Buoy Euro Shares

Reuters
Friday, 30 May 2008 | 11:46 AM ET

European shares rose on Friday, driven by a fall in the oil price that temporarily alleviated some of the building concern about inflation and by a recovery in the banking sector after a flurry of upbeat U.S. data.

The FTSEurofirst 300 index of top European shares rose 0.17 percent to close unofficially at 1,332.59 points, bringing the loss for May to 0.4 percent.

"The economic figures coming out of the U.S. are decent ... so that is supportive. We've also had a strong week as it's the end of the month," said Philippe Gijels, a European strategist at Fortis Bank in Brussels.

"What is certainly supportive to the equity markets is the oil price coming down a bit and we hope of course they will fall further and decrease inflationary fears."

UniCredit, BNP Paribas and ING were all among the top positive weights on the broader market, rising between 1.3 and 4 percent, while oil majors BP, Royal Dutch Shell and Total fell 0.6 to 1.7 percent, reflecting the drop in crude oil to around $126 a barrel from its recent record highs above $135.

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