LONDON, June 11 (Reuters) – European shares edged higher on Friday, rising for the third day on optimism over global growth, while BP (BP.L) recovered on hopes it dividend might be deferred rather than cut as it continued battling an oil spill.
By 0845 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 0.4 percent at 1,017.93 points. The index is down around 8.6 percent from a mid-April peak on concerns about the euro zone debt crisis.
British energy group BP gained 5.9 percent following recent sharp losses on hopes its dividend might be deferred rather than cut.
The Wall Street Journal reported the British oil company was considering deferring or reducing its second quarter dividend to help quell the political uproar in the United States over the environmental disaster caused by the massive spill.
British newspapers also rounded on U.S. President Barack Obama over his criticism of the company.
Graphic on the Gulf oil spill.
However, analysts suggested rises in BP shares could be limited. U.S. government scientists doubled their estimate of the amount of oil gushing out of its ruptured Gulf of Mexico well. The stock is still down 43 percent since the oil spill started mid-April.
“BP is just a high beta trade and if investors want to take more risk then they will invest in the stock as it will go higher than the rest,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.
“European shares are modestly higher given a strong rebound in Asia. I think it is a bear market rally as the sovereign debt problems can not be solved in a couple of days.”
Banks added to the previous session gains on the global growth optimism. Banco Santander (SAN.MC), BNP Paribas (BNPP.PA) and UBS (UBSN.VX) rose 1.6 to 2.6 percent.
Drugmakers featured among the top performers. Novartis (NOVN.VX) gained 2.3 percent after its multiple sclerosis pill Gilenia won strong backing from a U.S. advisory panel.
On the downside, the mining sector featured among the worse performers. Australian Prime Minister Kevin Rudd denied on Friday talk of a swift deal with miners over his controversial mining tax, as global miner BHP Billiton rejected a rumoured compromise affecting the nation’s top export sector.
Anglo American (AAL.L) and Rio Tinto (RIO.L) fell 0.6 and 1.1 percent respectively.
Across Europe, the FTSE 100 .FTSE index was up 0.1 percent, Germany’s DAX .GDAXI was down 0.2 percent and France’s CAC 40 .FCHI was up 0.3 percent.
Spain’s IBEX 35 .IBEX gained 1.8 percent, Portugal’s PSI 20 .PSI20 rose 0.4 percent and Italy’s benchmark was up 0.3 percent. (Editing by Hans Peters)