European stocks were higher midday on Thursday, with banks gaining ground following solid results from Barclays and ahead of the European Central Bank's interest rate decision, according to Reuters. By 1102 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,197.29 points, rising for the third consecutive session. The DJ Stoxx index of European banks rose 0.8 percent, with Barclays rallying 5 percent after its first-half results beat analysts' estimates. Other banks also gained ground, with UBS up 4.2 percent and Deutsche Bank adding 1.9 percent. "Risk-weighted assets declined in H1, resulting in better than expected pro forma equity tier 1 ratio of 6 percent," Cazenove highlighted in a note and concluded that Barclays delivered an overall good performance, given the current trading environment. Financials remain in the spotlight ahead of the ECB's policy decision at 1145 GMT at which it is expected to keep euro zone rates at 4.25 percent. The statement from the Governing Council and the press conference by President Jean-Claude Trichet will be closely watched for any insight into ECB policymakers' thinking on future policy moves. The Bank of England said earlier in the session that it was leaving UK interest rates at 5 percent for the moment. "The European economy is relatively weak and looking at the economic data, most of it has been below expectations," said Thierry Lacraz, strategist at Pictet in Geneva, who also expects the ECB to hold rates this month, while stressing the deteriorating situation in the euro zone. "Europe is probably the place with the most negative surprises," he said, adding the U.S. had performed surprisingly well in contrast. He further noted that the recent sharp decline in crude, which is some 19 percent off its all-time high hit on July 11, will result in lower inflation expectations, which will give the central bank more room to act. Around Europe, Germany's DAX index rose 0.3 percent, UK's FTSE 100 index gained 0.5 percent, and France's CAC 40 added 1.1 percent.
