European shares rose in early trade on Thursday, lifted by a raft of mostly positive earnings and word from the U.S. Federal Reserve it would keep rates near zero for an extended period, according to Reuters. However, worries remained about downgrades to euro zone sovereign debt. At 0844 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,064.38 points. This followed a decline of 4.2 percent over the previous two sessions, after Standard & Poor's cut debt ratings for Greece, Portugal and Spain. Banks were mostly higher. BNP Paribas, Barclays, Deutsche Bank, HSBC and Standard Chartered rose between 1.2 and 2.1 percent. Banco Santander rose 4 percent after its first-quarter results beat forecasts. Greek banks rose 8 percent on optimism that an aid package from the European Union and International Monetary Fund would be delivered in time to prevent Greece defaulting on its debt. However, oil major and index heavyweight BP fell 1.7 percent after it discovered an additional leak at an oil spill in the Gulf of Mexico. BG and Repsol, up 1.8 and 2.7 percent respectively after first-quarter earnings, helped to keep the energy sector positive. "There was a mild positive for markets, as there was a slight chance the Fed would change something," said Bernard McAlinden, investment strategist at NCB Stockbrokers. "But there could be more of a correction. There are some signs of urgency for the Greek aid package, but the conditions are not yet known, so there was only a little relief there." "The overwhelmingly positive thing is that earnings are coming through." Across Europe, Britain's FTSE 100, Germany's DAX, France's CAC40 and Spain's IBEX 35 rose between 0.3 and 2 percent. The FTSEurofirst 300 index is up more than 64 percent from its lifetime low of March 9, 2009. UNILEVER RISES Among other individual companies reporting earnings, consumer goods giant Unilever rose 3.1 percent after beating forecasts with a 4.1 percent rise in first-quarter underlying sales. German industrial conglomerate Siemens was up 1 percent following a raised profit outlook on the back of cost cuts and a strong recovery in products sensitive to economic swings. French drinks group Pernod Ricard gained 4 percent, pleasing the market with a raised full-year profit target and third-quarter sales above forecasts. But Germany's BASF fell 2.9 percent on profit-taking after it surpassed analysts' earnings expectations for the fifth straight quarter as it became the latest chemical maker to be shored up by demand from Asia. Investors will look at weekly U.S. jobless data, due at 1230 GMT, for clues on the strength of the recovery in the world's biggest economy. U.S. stocks rose on Wednesday after the Federal Reserve said it would keep interest rates low for an extended period, and pointed to signs of strength in the economy.
