Transocean leads the charge

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European equities led by Transocean strode to new two-year highs on Thursday as a US government report into the oil spill off the Gulf of Mexico was greeted positively by investors.

The Swiss-listed oil rig contractor and owner of the Deepwater Horizon drilling platform that exploded in April was one of the biggest winners in the morning session even as the US report criticised the company for a “failure of management”. But it stopped short of raising concern in the market that the costs associated with the spill would be more significant than levels already factored into stock prices.

A report from the National Commission set up by the Obama administration after the spill condemned Halliburton, BP and Transocean saying that better management could have “prevented the blow-out”. In London, BP’s stock also rose.

By mid-session the FTSE Eurofirst 300 index was up 0.8 per cent to 1,151.26, as US employment figures from the previous session prompted further optimism about global growth prospects in 2011. The index has now gained 2.7 per cent since the beginning of the year.

Payroll data on Wednesday showed that private employers added 297,000 jobs in December, according to ADP Employer Services, which is the largest gain on their records which started in 2000.

Those figure led many economists to revise up their estimates for the widely-followed US non-farm payroll figures which will come out on Friday.

Defence stocks gained the most in the session, led by Paris-listed EADS which continued to gain after news on Monday that the French defence ministry had ordered 200 missiles from MBDA, Europe’s leading missile maker, which is part-owned by EADS. The company gained 3.9 per cent to €19.01 in morning trading.

Elsewhere in the defence sector, Safran was up 2.3 per cent to €28.04 after UBS raised its price target on the stock to €34 from €28 and kept its “buy” rating.

The Eurofirst 300 Aerospace & Defence index was up 2.6 per cent to 714.43, a two-year high.

The chemical sector also saw gains, helped by a series of ratings upgrades. Syngenta, the Swiss agrochemicals group, rose 1.9 per cent to SFr289 as UBS raised its price target on the stock from SFr255 to SFr280.

Akzo Nobel, the Dutch paints and chemicals group, was up 2.2 per cent to €46.22 after ING upgraded the company from “hold” to “buy”. The Eurofirst Chemicals sector added 1.4 per cent to 1,827.24.

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