LONDON, Jan 15 - European shares rose on Thursday afternoon, underpinned by strength in the insurance and banking sectors, while investors took the best reading from a mixed bag of U.S. economic numbers. A better-than-expected set of results and upbeat outlook from IBM helped sweeten the sour tone left by Intel's outlook late on Wednesday, when the world's top chip group forecast a drop in turnover in the first quarter. IBM shares jumped ahead of the opening bell in New York after the group brought forward its results by a week. Wall Street was headed for a mixed opening. Investors digested data that showed U.S. jobless claims fell last week in a better-than-expected report, while the New York's Federal Reserve Empire State index of business conditions hit a record high in January. But U.S. retail sales in December came in weaker than expected, while consumer inflation was in line with expectations. "The retail sales were soggy, but the jobless claims numbers continued to improve, and when you tie that in with the Empire State data, it does look as though you will start to see the labour market turn," said Matthew Wickens, an economist at ABN AMRO Bank.
"That will hopefully deliver stronger retail sales," Wickens said, adding that with core inflation still weak, the Federal Reserve would continue to sit on its hands and leave U.S. interest rates unchanged. By 1350 GMT, the FTSE Eurotop 300 index <.FTEU3> of European shares was up 0.2 percent at 981 points, after clocking up its best close in 16 months on Wednesday. The DJ Euro Stoxx 50 index <.STOXX50E> was 0.5 percent ahead at 2,844 points. The DJ Stoxx insurance stocks index <.SXIP> was Europe's strongest sector performer, up 2.4 percent at its best levels in over a year as insurers dominated the blue-chip advancers' column amid several broker upgrades, with Dutch firm ING up 4.3 percent. Other standouts included UK media firm , with the shares rising 13.6 percent to an 18-month high after the group said the worst of a two-year revenue slide was over. In the banking sector, news that U.S. bank J.P. Morgan had agreed to buy Chicago-based Bank One for about $58 billion in stock, rekindled talk of mergers in Europe too, with Germany seen as ripe for consolidation. Shares in Deutsche Bank , the country's largest bank, rose two percent to 65 euros, making it one of the top blue-chip gainers in Europe. Domestic rivals Commerzbank and HVB Group were up 3.8 percent and 2.7 percent respectively.//