Pharmaceutical stocks

“The era of defensive stocks will be in play for the next couple of months as bad news comes forth from areas where there have been forecasts of concerns such as banks and the property sectors,” said Robert Quinn, Standard and Poors’ european equity strategist.

By midday, the FTSE Eurofirst 300 was up 0.6 per cent to 1,465.89, while Germany’s Xetra Dax gained 0.5 per cent to 7,858.55, France’s CAC 40 added 0.9 per cent to 5,501.36, and the FTSE 100 in London rose 0.5 per cent to 6,365.9.

Pharmaceutical stocks were the vanguard, with Swiss giant Roche rising 4.5 per cent to SFr200.80 and domestic rival Novartis up 3.6 per cent to SFr63.60 while France’s Sanofi-Aventis (NYSE:SNY) gained 4 per cent to EU65.39 and Denmark’s Novo Nordisk rose 1.9 per cent to DKr324.

France Telecom (NYSE:FTE)rose 2.3 per cent to EU25.76 on rumours the French government had set a date to sell another stake in the company.

Meanwhile, Bouygues, the French construction and telecoms group, gained 3.4 per cent to EU54.18 on suggestions from president Nicolas Sarkozy that the government may axe adverts on public television.

Bouyges owns a 42.8 per cent stake in commercial TV channel TF1, which soared 12.3 per cent to EU18.76 on hopes such a move would increase advertising revenues. Rival commercial broadcaster M6 rose 7.7 per cent to EU17.73.

French media group Lagardere jumped 6 per cent to EU54.30 after UBS raised its recommendation from “neutral” to “buy”. The broker cited limited earnings risk and hopes of a reduced fine from AMF, France’s stock market watchdog, relating to insider dealing charges.

“It is increasingly likely that the AMF may abandon or change the focus of its EADS insider dealing investigation over the coming months. This is likely to remove a major overhang on the shares that could have resulted in a EU6.5bn fine for the company on a worst case scenerio,” UBS said.

Largardere is one of the core shareholders in aerospace group EADS.