European stocks eke out gain, break losing run

European stocks snapped a three-day losing run to close higher yesterday, but the gains were marginal as investors faced further evidence of a deepening recession in the United States.

The FTSEurofirst 300 index of top European shares rose 0.1 per cent to close at 763.80 points, having been up as much as 1.1 per cent earlier in the session. The index has lost 8.2 per cent this year, having fallen 45 per cent in 2008.

Around Europe, UK's FTSE 100 index rose 0.3 per cent, Germany's DAX index was up 0.2 per cent and France's CAC 40 was down 0.1 per cent.

"US data continues to get worse and worse and is even coming in below expectations," said Georgina Taylor, equity strategist at Legal & General Investment Management.

"The last few days have highlighted that the volatility is going to continue," Ms Taylor said. "Taking a directional view is very difficult when none of the data is suggesting that we're anywhere near a turning point."

The number of US workers drawing unemployment aid jumped to a record high in early February according to data yesterday that highlighted the deteriorating labour market as a 13-month recession deepens.

The Federal Reserve Bank of Philadelphia said its index of business conditions in the US Mid-Atlantic region fell in February to -41.3, the lowest level since 1990, from -24.3 in January.

Corporate earnings from major European players had a mixed reception.

Nestle, the world's biggest food group, added more points to the pan-European index than any other company. It rose 5.2 per cent after beating forecasts with underlying sales growth of 8.3 per cent in 2008 and was cautiously upbeat for 2009.

Other food groups were on the rise, with Danone up 1.8 per cent.

Austria's Raiffeisen International closed up 10.4 per cent after the company released early full-year results which beat its own guidance.

UBS rose 4.8 per cent after the Swiss lender agreed to pay $780 million in a deal to resolve fraud charges that it assisted rich Americans to evade taxes.