Telecoms help European stocks nudge higher

European shares made fresh gains yesterday thanks to good figures from BT while falling crude prices underpinned sentiment.

BT shares shot up four per cent after Britain's leading fixed-line telecom reported fourth-quarter earnings at the top end of forecasts and promised higher future payouts to investors.

French group Vivendi beat expectations with its first-quarter numbers while Goldman Sachs upgraded its ratings on France Telecom, Britain's O2 and Spain's Telefonica.

By 1145 GMT, the FTSEurofirst 300 index was 0.2 per cent stronger at 1,089.4 points with the telecoms index up 0.7 per cent. The FTSEurofirst gained 1.3 per cent or nearly 13 points on Wednesday and ended at a one-month high.

Struggling to break out of a lull after hitting two-and-a-half year highs in March, investors see the market poised to advance.

"Valuations look pretty reasonable and if you look at the interest by venture capilists in quoted equities that highlights how cheap some valuations are," Adrian Darley at fund managers Gartmore said.

"Over the next year we see five to 10 per cent higher global growth and that is still pretty supportive."

Shares in British retailers reacted positively to a 0.5 per cent rise in April retail sales but a revision down in March and companies' own figures still concerned the market.

Boots, which earlier reported an 11 per cent drop in full year profits, added 2.4 per cent and furniture store MFI saw shares climb five per cent despite saying sales growth had tailed off since March.

A strong close on Wall Street, boosted by tame inflation data on Wednesday and strength in Asian shares also pushed up European bourses.