Banks up as Greece asks for activation of aid package
* Upbeat U.S. new home sales boost recovery hopes
By Harpreet Bhal
LONDON, April 23 (Reuters) - European shares closed higher on Friday, led by banks, as Greece's request for an emergency loan and upbeat U.S. home sales boosted investors' confidence, while Volvo (VOLVb.ST) rose after reporting strong results.
The pan-European FTSEurofirst 300 .FTEU3 index of top shares closed up 0.8 percent at 1,092.24 points, rebounding after two days of declines. The index is up more by around 69 percent from a lifetime low hit in March last year.
Banks were among the biggest gainers as concerns over Greece's debt situation partly eased after Athens asked the European Union (EU) and the International Monetary Fund (IMF) to activate its package of 45 billion euros ($60.49 billion) in emergency loans in what could be the largest state bailout ever attempted. [ID:nLDE63M0XZ]
Barclays (BARC.L), HSBC (HSBA.L), Commerzbank (CBKG.DE), BNP Paribas (BNPP.PA) and Banco Santander (SAN.MC) were up 0.3 to 0.7 percent.
"There is a bit more certainty over Greece ... but the true fact of the matter is that 45 billion (euros) isn't enough to sort out the Greek problem," said David Morrison, market strategist at GFT Global.
"It might sort out their short-term needs but it's just storing up more trouble for later on".
Greek banks .FTATBNK added 0.1 percent.
Questions also remained on how the loan would be disbursed and any possible delays to the process.
Greece expects to receive before May 19 the first tranche of funds under the EU/IMF aid package it has formally requested, Finance Minister George Papaconstantinou said. [ID:nLDE63M1GC]
"Concerns remain during this transitory phase as regards the terms that will be asked for the loans with markets also watching the process of aid approval," said analyst Nick Galousis at Kappa Securities in Athens.
Among individual movers, truck maker Volvo (VOLVb.ST) surged more than 10 percent after first-quarter profits beat expectations. [ID:nLDE63M04Y]
Ericsson (ERICb.ST) rose 10.3 percent as analysts focused on strong margin growth as a sign of better times ahead for the mobile telecom gear maker after it undershot estimates for first-quarter profit. [ID:nLDE63M0PP]
Within the technology sector, Capgemini (CAPP.PA), ASML (ASML.AS), Autonomy (AUTN.L) and Infineon (IFXGn.DE) rose 1.1 to 2.4 percent.
STMicroelectronics (STM.PA), however, fell 5.1 percent, with analysts citing nerves over recovery prospects for the ST-Ericsson joint venture as Europe's largest chipmaker swings to a quarterly net profit.
HOME SALES SURGE
Sales of newly built U.S. single-family homes rebounded strongly in March to touch their highest level in eight months, suggesting the economic recovery was gathering momentum.
In Britain, data showed the economy grew 0.2 percent in the first quarter, less than the 0.4 percent analysts had forecast. [ID:nONS004958]
Other gainers in Europe included cruise firm Carnival (CCL.L) which rose 5.8 percent, touching its highest since January 2007, with traders citing a spike in demand for cruise holidays following the Icelandic volcano which grounded air traffic in Europe.
Fallers included SES (SESFd.PA), which fell 4.3 percent after the satellite operator cut its 2010 growth forecast and reported weaker-than-expected first-quarter figures.
Across Europe, Britain's the FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC 40.FCHI added 0.7 to 1.5 percent.
Additional reporting by George Georgiopoulos in Athens; Editing by Rupert Winchester
Reuters
