Europe's biggest company and the world's largest fashion chain Hennes & Mauritz hog the limelight next week, after weaker than expected US jobs data dispelled rate-hike clouds over European markets. The week kicks off with an update from oil major BP, which should shed some light on whether production from the company's non-Russian assets is starting to grow again, and may also offer insight into the costs of the recent Texas City explosion. Analysts were optimistic. "We're comfortable buying BP. We think the scope for upgrades to earnings is still there because of a higher oil price," said John Smith, investment director at Brown Shipley.
A weaker-than-expected US jobs report on Friday initially depressed European stock markets but then added to earlier gains as inflation worries and the threat of sharp rises in interest rates eased.
By 1500 GMT, the FTSEurofirst was 0.6 percent higher at 1,092 points, led by oil groups BP and bank Barclays. Britain's FTSE 100 index was up 0.7 percent.
"This report is certainly going to flatten scenarios of sharp monetary tightening, but it doesn't mean this is supportive for equity markets," said SG economist Veronique Riches-Flores.
Markets have struggled to make headway since hitting near three-year highs in early March as rising energy costs threatened to choke corporate profits and curb consumer spending and US rate hike fears weighed on sentiment.
Sectors less exposed to sky-high oil prices, such as pharmaceuticals, financials, telecoms and food, are expected to remain buoyant.
"They have oodles of cash and therefore they look reasonable value, and they will continue pushing dividends out to the share holder," said Karen Olney, European equity strategist at Dresdner Kleinwort Wasserstein.
In the UK, analysts advised investors to steer clear of UK banking stocks ahead of a Bank of England rate announcement on Thursday.
Some predict at least one more near-term rate rise, putting strain on already heavily indebted British borrowers.
"We would suggest giving UK mortgage banks a wide berth. I think there are risks of an interest rate rise. It's perhaps more finely balanced than it has been," said Robert Jukes, strategist at Credit Suisse First Boston.
Turning to retail, some analysts did not expect stellar first quarter sales data from H&M on Wednesday, despite the fact that shares in the company have gained almost a fifth of their value in the last six months.
Analysts covering H&M - the world's biggest fashion chain by market capitalisation - said the likelihood of weak sales was due to a difficult February for retailers, but were optimistic on full-year prospects.
"Since Q1 accounts for just 16 percent of annual profit, the effect on full year estimates may be muted. We remain upbeat about the format's medium-term prospects," investment bank UBS said in a research note.
Apart from H&M and BP, investors will also eye mobile phone companies Ericsson, which has its annual general meeting on Wednesday, and Nokia, which will hold its AGM on Thursday.
Also on Thursday, British health and beauty retailer Boots, which last month said annual profits at its main chemist chain would fall short of analyst expectations, will release a trading statement.
France-based food service company Sodexho Alliance will announce its first half sales on Wednesday.
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