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Europe stocks end on 10-day highs
LONDON, England -- European stocks ended Wednesday at 10-day highs as bid talk surrounding Abbey National buoyed heavily-weighted financial shares, and ABB surged again after a key analyst upgrade. London's FTSE 100 index edged up 0.10 percent to end the day at 4,141.20 points. In Paris, the CAC-40 rose 0.98 percent to close at 3,173.03 points while the Zurich SMI closed up 0.84 percent at 5,034.60. In Frankfurt at 1600 GMT the Xetra DAX was up 0.04 percent at 3,429.58. At the same time the FTSE Eurotop 300 index of pan-European blue chips was up 0.57 percent at 873 points, while the narrower DJ Euro Stoxx 50 index firmed 0.54 percent to 2,484. The benchmark Eurotop 300 has been swirling within a narrow 50-point trading range since the middle of June, after a sharp three-month rally lifted the index some 30 percent above a six-year nadir hit on March 12. Syngenta, the world's top agrochemicals firm, saw its shares rise 2.2 percent after first-half profit rose by almost a fifth. Suez, meanwhile, rallied 5.4 percent on anticipation the French utilities group would announce new cost-cutting measures when it reports Thursday. Investors braced for another slew of earnings on Thursday, but numbers already out for a majority of European blue chips painted a mixed picture as companies eke out profits through cost-cutting, not top-line growth. "Markets see results that are roughly in line with forecasts but our concern is about what will happen later this year and into next year," HSBC global equity strategist Patrik Schowitz, who expects European stock markets to fall between 10 to 15 percent between now and year-end, told Reuters. Schowitz said the strong euro, which he expects to resume its rise against the dollar, will hurt European exporters again, while the lack of pickup in inflation could affect companies' sales growth. "Cost-cutting can only go for that long and we feel its effect is running out of steam." Abbey National shares rallied nearly 10 percent amid bid speculation after the British bank announced progress in selling its risky wholesale banking assets, making it more palatable for an overseas buyer. The stock's gains came despite the company failing to met consensus forecasts. Tough markets have punished financial sector in recent years. (Full story) Investors cheered UK life assurance company Friends Provident, pushing the stock up 6.9 percent after new business sales drove first-half profits above expectations. Other gainers included engineering firm ABB, up another 11.5 percent as investors further digested its improved second-quarter results, which prompted once-skeptical Deutsche Bank to declare on Wednesday the group had turned the corner. Analyst upgrades also lifted French telecoms equipment maker Alcatel, up 5.2 percent after it surprised the market on Tuesday with a second quarter operating profit. But things looked less bright for French media group Vivendi Universal, off 2.6 percent after Metro-Goldwyn-Mayer abruptly withdrew from the auction for Vivendi's U.S. media assets, saying the price was too high. (Full story) French drugmaker Aventis sagged nearly three percent on the back of a rating downgrade by Deutsche Bank, which cited a deteriorating cash flow outlook and the likely impact of generic competition to its Allegra hayfever drug.
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