European shares rise for 4th day; H&M, Vivendi sag

By Dominic Lau LONDON, Nov 16 (Reuters) - European shares advanced for the fourth straight session on Monday, with commodity stocks leading the gainers as raw material prices benefited from a weaker U.S. dollar, but retailer H&M fell after weak October sales. By 0841 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,025.91 points, after closing 0.4 percent higher on Friday to hit a three-week closing for the second day in a row. Miners were in demand with spot gold hitting a record high as investors maintained their appetite for gold as a hedge against currencies. BHP Billiton, Rio Tinto, Anglo American , Xstrata and Randgold Resources were up 2.3-4.5 percent. The United States and China sparred over exchange rates at a meeting of Asia Pacific leaders on Sunday, a move that quashed expectations that China may allow the yuan scope to rise in coordination with U.S. President Barack Obama's first trip to Beijing. The softer U.S. currency makes commodity assets cheaper for non-dollar-based investors. Crude prices were also higher, aiding energy producers such as BP, Total and Royal Dutch Shell, which put on 0.4-0.8 percent. "We have overcome this (weakness in late October and early November) because macro-economic data came in much better than expected, even today the Japanese GDP is way stronger from what economists expected," said Franz Wenzel, strategist at AXA Investment Managers in Paris. Data showed Japan's economy grew 1.2 percent in the third quarter, nearly double the forecast and the fastest pace in more than two years. "All of that confirms that ... the market is on an uptrend which could easily take the market another 10 to 15 percent higher till the year end. We are basically in the midst of an year-end rally," Wenzel said. The pan-European index has rallied 59 percent since hitting a trough in early March, and is up 23 percent for the year. Across Europe, Britain's FTSE 100 was up 0.8 percent on Monday, Germany's put on 0.9 percent and France's CAC 40 added 0.8 percent. H&M HIT Swedish fashion giant Hennes & Mauritz dropped 4.1 percent after posting an unexpected 3 percent drop in sales at established stores in October, blaming the economic conditions in some of its major markets. Rival Inditex, owner of the Zara chain, dipped 0.8 percent. Also on the downside, Vivendi slipped 2.1 percent. The French entertainment group on Friday gained control of Brazilian telecom company GVT for up to $2.39 billion, trumping Spain's Telefonica to gain a foothold in Latin America's biggest market. Telefonica shares, however, were up 0.3 percent. Bank were higher, with UBS, Societe Generale , HSBC, Commerzbank and Dexia up 1.3-2.2 percent. European Central Bank Governing Council Member Miguel Angel Fernandez Ordonez said an increase in euro zone interest rates was not on the radar at present. Investors will keep an eye on U.S. retail sales for October and New York Federal Reserve's Empire State manufacturing survey, both due at 1330 GMT, for further evidence of the economic recovery. ThyssenKrupp advanced 3.2 percent after the steelmaker confirmed it was selling its scaffolding unit Safway to Odyssey Investment Partners and BofA Merrill Lynch raised its price target for the stock. (Editing by Mike Nesbit) Keywords: MARKETS EUROPE STOCKS/ ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance: Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2 ([e-mail]; [phone]; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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