By Sarah Turner
European shares ended higher Thursday, with banks and aviation-linked shares rising amid optimism over a global economic rebound.
After gaining 1.4% in the previous session, the pan-European Dow Jones Stoxx 600 rose 0.5% to 246.15, hitting another fresh 2009 high. On a regional level, the U.K. FTSE 100 Index rose 0.8% to 5163.95, the German DAX climbed 0.5% to 5731.14 and the French CAC-40 Index rose 0.6% to 3835.27.
Advancers far outnumbered decliners in London, Frankfurt and Paris. "Across the globe tightening credit spreads and declining fixed-income yields continue to drive cash into equities," said Ian Williams, strategist at Altium Securities
Banks, which are among companies considered most leveraged to an economic recovery, advanced Thursday, with Societe Generale /zigman2/quotes/206663756/delayed FR:GLE -4.92% shares up 3.8%. Irish bank stocks surged after the government unveiled plans to spend $79 billion to shift their toxic debts to a new state-run "bad bank." Allied Irish Banks jumped 28.1% while Bank of Ireland gained 17.9%.
The aviation sector posted notable gains on a series of broker upgrades. British Airways rose 5.5% as Goldman Sachs added the U.K. airline to its conviction buy list. Shares of no-frills airline easyJet /zigman2/quotes/202825892/delayed UK:EZJ -8.11% jumped 3.9% after an upgrade by Morgan Stanley, which said it sees renewed ability for growth. Morgan Stanley also upgraded EADS, sending shares 6.3% higher. The broker said a positive trend in capacity growth intentions for airlines globally bodes well for manufacturers.
Elsewhere, Danisco shares jumped 13.8% after the company lifted its fiscal-year guidance and reported a better-than-expected first-half profit.
Balfour Beatty /zigman2/quotes/202863772/delayed UK:BBY -2.87% climbed 7.9%. The engineering firm said it will acquire Parsons Brinckerhoff for $626 million and will finance the deal with a rights issue.
Bucking the broader trend, shares of German business software provider SAP /zigman2/quotes/203458330/delayed DE:SAP +0.66% fell 1.5% after rival U.S. Oracle /zigman2/quotes/202180826/composite ORCL +0.28% posted lower first-quarter sales.
Navigation services firm TomTom /zigman2/quotes/203605238/delayed NL:TOM2 +0.07% declined 4.7% on a Merrill Lynch downgrade. The broker said shares are already pricing in success for its expansion into in-car and smartphones, while success is far from certain.
German semiconductor group Infineon fell 2.9% after it was also downgraded by Merrill Lynch, which said the stock looks expensive relative to other stocks in the sector.
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