Europe Markets: Shares turn slightly higher in Europe

By Simon Kennedy, MarketWatch

LONDON (MarketWatch) — European stocks reversed early losses to trade slightly higher Wednesday, with Peugeot and BASF both rising after lifting their outlooks and with a handful of other high-profile shares also gaining.

The Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 265.21, -0.03, -0.01%)  rose 0.3% to 266.04.

The benchmark turned higher after the minutes of the Bank of England’s October rate-setting meeting showed that some policy makers felt the likelihood that further monetary easing will be needed has increased in the last few months. See more on the Bank of England’s three-way split.

U.S. stock market futures also indicated a stronger start, leaving behind a decidedly weak Tuesday session on Wall Street. This helped lift European markets further, while Asian markets closed mostly lower overnight as they reacted to China’s surprise move to raise lending and deposit rates on Tuesday.

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Among the main European indexes, the French CAC 40 index /quotes/comstock/30t!i:px1 (FR:PX1 3,812, +5.17, +0.14%)  climbed 0.6% to 3,828.75, while the U.K.’s FTSE 100 /quotes/comstock/23i!i:ukx (UK:UKX 5,696, -8.05, -0.14%)  rose 0.3% to 5,719.54 and the German DAX 30 index /quotes/comstock/30p!dax (DX:DAX 6,494, +3.03, +0.05%) added 0.3%% to 6,509.38.

In Paris, shares of PSA Peugeot Citroen /quotes/comstock/24s!e:ug (FR:UG 27.80, +0.38, +1.37%)  rose 1.8%. The French car maker said revenue grew 10% in the third quarter as management lifted its earnings forecast for the year.

And shares of BASF /quotes/comstock/11e!fbas (DE:BAS 51.22, +0.69, +1.37%)  moved 1.3% higher in Frankfurt, gaining after the German chemicals giant revised higher its own outlook for the year and reported a 23% jump in sales for the third quarter.

A notable decliner, Swedish defense and aerospace group Saab /quotes/comstock/22u!saab-b (SE:SAABB 100.60, -6.90, -6.42%)  saw its shares drop 5.6%.

The company cut its outlook, saying restructuring costs in the fourth quarter mean operating profit for the year will now be lower than for 2009. Saab also said it continues to expect sales for the year will be broadly flat.

But TomTom /quotes/comstock/24s!e:tom2 (NL:TOM2 6.12, +0.05, +0.86%) , the Dutch maker of equipment used in satellite-navigation systems, reversed early losses to trade up 2.8% in Amsterdam.

The company said profit in the latest quarter dropped by more than a third as margin narrowed, hurt by the weak dollar. However TomTom also said it still expects to achieve its financial targets for the year.

Novo Nordisk /quotes/comstock/13*!nvo/quotes/nls/nvo (NVO 90.99, -4.88, -5.09%)  jumped nearly 9% in Copenhagen. Analysts said the stock gained on a U.S. regulatory decision to demand further studies of a drug seen as a potential rival to Victoza, Novo Nordisk’s diabetes drug.

Mining stocks were also relatively strong, with BHP Billiton /quotes/comstock/23s!a:blt (UK:BLT 2,164, +24.50, +1.15%)   /quotes/comstock/13*!bhp/quotes/nls/bhp (BHP 78.73, -3.53, -4.29%)  climbing 1.7% after announcing a rise in iron-ore production and following a report that its $39 billion bid for Potash Corp. of Saskatchewan /quotes/comstock/13*!pot/quotes/nls/pot (POT 143.43, +0.22, +0.15%)  is likely to be rejected by the Saskatchewan government. See story on BHP Billiton.

Also in London, Rio Tinto /quotes/comstock/23s!a:rio (UK:RIO 4,002, +53.50, +1.36%)   /quotes/comstock/13*!rio/quotes/nls/rio (RIO 62.06, -3.38, -5.17%)  rose 1.8% after saying it would invest $3.1 billion to expand iron-ore production in Australia.

Among smaller companies, shares of Hansen Transmissions International /quotes/comstock/23s!e:hsn (UK:HSN 41.55, -8.75, -17.40%) , which makes gearboxes for wind turbines, slumped more than 18%. The company slashed its revenue forecast for the year as customers delayed orders.

Simon Kennedy is the City correspondent for MarketWatch in London.

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