Spain, General Electric push European shares up

European shares rose on Friday as Spain's plans to part nationalise its debt-laden savings banks boosted banking stocks, while forecast beating results from US bellwether General Electric also improved market sentiment. The pan-European FTSEurofirst 300 index of top shares closed 0.8 percent higher at 1,148.32 points recovering after two-days of losses, though ended off the day's high as some investors took profits ahead of the weekend.
"The biggest risk to the European economies is the macro politics in the peripheries, short-term this has improved and the equity markets are now playing catch up," Philip Isherwood, head of equity strategy at Evolution Securities said.
A source familiar with the matter said the government would force debt-laden regional savings banks to become conventional banks, while Deputy Prime Minister Alfredo Perez Rubalcaba said Spain would step up plans to improve the solvency and credibility of its cajas. Spain's IBEX 35 index rose 1.8 percent, while Spanish banks BBVA and Banco Santander gained 3.4 percent and 3.8 percent respectively.
Outside Spain, other banks were also performing well, with the STOXX Europe 600 Banks up 1.1 percent. Royal Bank of Scotland soared 6.5 percent after an industry source said Britain's Treasury are in talks over RBS's possible early exit from the government asset protection scheme that insures the bank's riskiest assets.
Franco-Belgian financial group Dexia jumped 3.9 percent after it said it was finalising a funding agreement with the banking arm of France's La Poste. Retailers also performed well. Belgian supermarket group Delhaize gained 2.6 percent after it reported like-for-like sales in Belgium which doubled consensus expectations late on Thursday.
German retailer Metro were 2.2 percent higher boosted by the upbeat figures from Delhaize. The Euro STOXX 50 was up 1.5 percent at 2,970.56 points. Across Europe, the FTSE 100 index was 0.5 percent higher, Germany's DAX was up 0.5 percent and France's CAC 40 gained 1.3 percent. The Peripheral Eurozone Countries Index was 2.2 percent higher.