By Marie Maitre LONDON, July 30 - European stocks ended Wednesday at 10-day highs as bid talk surrounding Abbey National buoyed heavily-weighted financial shares, and ABB surged again after a key broker upgrade. Syngenta, the world's top agrochemicals firm, saw its shares rise 2.2 percent after first-half profit rose by almost a fifth. Suez, meanwhile, rallied 5.4 percent on anticipation the French utilities group would announce new cost-cutting measures when it reports on Thursday. Investors braced for another slew of earnings on Thursday -- including banking giants BNP Paribas and Deutsche Bank -- but numbers already out for a majority of European blue chips painted a mixed picture as a number of firms manage to boost profits through cost-cutting, not top-line growth. The FTSE Eurotop 300 index of pan-European blue chips closed up 0.58 percent at 873.34 points, while the narrower DJ Euro Stoxx 50 index firmed 0.55 percent to 2,483.90. The benchmark Eurotop 300 has been swirling within a narrow 50-point trading range since the middle of June, after a sharp three-month rally lifted the index around 30 percent above a six-year nadir hit on March 12. "Markets see results that are roughly in line with forecasts but our concern is about what will happen later this year and into next year," said HSBC global equity strategist Patrik Schowitz, who expects European stock markets to fall between 10 to 15 percent between now and year-end. Schowitz said the strong euro, which he expects to resume its rise against the dollar, will hurt European exporters again, while the lack of pickup in inflation could affect companies' sales growth. "Cost-cutting can only go for that long and we feel its effect is running out of steam," he said, adding: "Also corporate outlooks are still glum, with nobody saying that things are going to be better looking forward." Around Europe, Paris and the Swiss blue chip index each closed one percent higher, London gained 0.1 percent and Frankfurt ended up 0.03 percent. In New York, the Dow Jones industrial average was off 0.3 percent at 9,179 points by 1810 GMT, while downbeat outlooks from technology companies pushed the Nasdaq Composite Index 0.7 percent lower to 1,720. As the second-quarter earnings season slowly draws to a close, economic data is likely to nab the spotlight again, with investors seeking new signs a recovery is in the making. Comments from the Federal Reserve, published in its Beige Book after most European markets had closed, that the U.S. economy was improving, especially in the long-suffering manufacturing sector, are likely to set a positive tone for European markets early on Thursday. But the U.S. central bank also said goods prices still appeared soft in much of the country and its comments that there had been an unexpected jump in car inventories during June and July may unsettle players in the European automobile sector. Investors will be on the lookout for further signs of improvement in the U.S. economy when key employment and manufacturing data are released later in the week.
FINANCIALS BUOY
Abbey National shares rallied 9.7 percent on bid speculation after the UK bank announced progress in selling its risky wholesale banking assets, making it more palatable for an overseas buyer. The rally came despite the bank failing to meet first-half consensus forecasts. Investors cheered UK life assurance company Friends Provident, pushing the stock up 6.9 percent after new business sales drove first-half profits above expectations. Other gainers included engineering firm ABB, up another 11.5 percent as investors further digested its improved quarterly results, which prompted once-sceptical Deutsche Bank to declare on Wednesday the group had turned the corner. Analyst upgrades also lifted French telecoms equipment maker Alcatel , up 5.2 percent after it surprised the market on Tuesday with a second-quarter operating profit. But things looked less bright for French media group Vivendi Universal , off 2.6 percent after Metro-Goldwyn-Mayer abruptly withdrew from the auction for Vivendi's U.S. media assets, saying the price was too high.