Financials driving European shares higher (Reuters) (18-04-2008)

LONDON, April 18 (Reuters) - European shares advanced on Friday on financials, after word of the possibility of Royal Bank of Scotland issuing a rights issue sparked optimism that banks were close to revealing the extent of their exposure to the financial crisis.

The FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,302.93 points by 0812 GMT. Advancing issues outnumbered decliners by about four to one, compared with seven to one in early trade. Banks accounted for about 20 percent of the net increase in the FTSEurofirst.

Societe Générale, BNP Paribas and UniCredit all gained between 1.7 and 1.9 percent, as investors await results from Citigroup. JPMorgan Chase and Merrill Lynch reported earlier this week, and while they unveiled further writedowns, results were not as grim as some investors had feared and shares in both companies are up between 6 and 7 percent this week.

Earnings from the major U.S. financials so far this week have been good, and tech stocks such as IBM and Google, have helped boost morale in Europe and the FTSEurofirst is on track for a 3.5 percent gain this month, its best in a year.

Rio Tinto shares was one of the largest drags on the broader market, falling 0.4 percent on market speculation BHP Billiton will not raise its bid for the company, traders said. BHP shares were down 0.6 percent.

BHP and Rio were the only two mining companies in the red. Antofagasta and Anglo American rose between 1.2 and 1.3 percent.

Source Reuters