European stocks end up, autos skid led by Renault

European shares ended higher yesterday, buoyed by a stream of generally bullish earnings and reversing a two-day losing streak, but French car maker Renault fell almost five per cent after a margin warning.

Takeover news added to the bullish mood with Saint-Gobain rising 3.1 per cent after the French building-materials firm agreed to buy BPB plc for £3.89 billion, lifting the British plasterboard maker's stock 3.7 per cent.

VNU shares jumped 2.5 per cent after the Dutch publisher abandoned its takeover of US health care data firm IMS Health and its chief executive quit.

By 1635 GMT the FTSEurofirst 300 index of leading European shares was up 0.43 per cent, ending unofficially at 1,230.33 points and heading back toward Monday's three-and-a-half-year high of 1,242.88.

Leading national indices in London, Frankfurt, Paris, Milan, Madrid and Zurich were all in positive territory. Among firms reporting earnings, Zurich Financial was a notable gainer, shooting up 5.6 per cent.

"(It) has reported figures more than 15 per cent ahead of our and the market's expectations," Fox-Pitt, Kelton analyst Neil Manser said.

"The outperformance was driven by the group's ability to absorb the heavy 3Q catastrophe season more easily than expected... and by a strong result in Europe and fewer attritional losses in global corporate."

But French Société Générale fell 0.7 per cent even though the eurozone's fifth-biggest bank by market value beat forecasts with a 40 per cent rise in third-quarter net profit on the back of higher investment banking revenues.

Vivendi Universal gained 0.8 per cent after profits beat forecasts. Hedge-fund company Man Group also rose after results.

UK retailer GUS gained 3.2 per cent after a drop in half-year profits was at the top end of estimates and it said it would hand its stake in Burberry to shareholders.

In other corporate news, Germany's Commerzbank AG closed three per cent up at a four-year high after it said it will buy control of mortgage lender Eurohypo AG for more than €4.5 billion. Commerzbank raised more than €1.25 billion by selling almost 60 million new shares to investors.

Renault shares lost 4.9 per cent after the French carmaker slashed its 2005 operating margin forecast to "more than three per cent" from more than four per cent after the market close on Wednesday, citing a worsened outlook for the European market.