On Friday, European shares were higher at midday, with commodities and financials the major risers as investor sentiment about a recovery in the global economy improved.

The energy sector was among the top risers as crude rose 0.6 per cent. Miners rose after Cazenove upgraded the European sector to “overweight” from “neutral,” saying an improving macro-economic environment and a robust Chinese economy suggested commodity pricing had probably seen its lows.

Banks also performed well after better than expected results from several US regional banks including PNC Financial Services Group. Credit Suisse was up 3.2 per cent, extending Thursday’s gains, as the bank’s outgoing chairman said it is better positioned than a year ago, thanks to a strong capital base and an early reduction of risk and will emerge as a clear winner from the market turmoil.

The pan-European FTSEurofirst 300 index of top shares was up 0.7 per cent at 797.22 points. Across Europe, the FTSE 100 index was up 1.6 per cent, Germany’s DAX rose 1.4 per cent, and France’s CAC 40 gained 1.5 per cent.

Japanese stocks fell, capping their biggest weekly drop in almost two months, as earnings reports from JFE Holdings Inc. and KDDI Corp. diminished optimism the recession is abating. The Nikkei 225 Stock Average dropped 1.6 per cent. The broader Topix index lost 1.1 per cent.

US stock index futures reversed early losses following a smaller-than-expected first-quarter loss from Ford as investors looked to the banking sector’s “stress test” for insight on the sector. Regulators conducting the “stress test” will begin to reveal their findings to the country’s 19 largest banks under investigation later in the session. Officials will also publicly outline the process they are using, which could give investors an insight into how tough the government’s stance will be. The final results of the test will be out on 4 May and will include details on the sustainability of banking giants such as Citigroup, JPMorgan Chase and Wells Fargo.

Valletta Fund Management Ltd, The Mall Offices, Level 6, The Mall, Floriana VLT 16,

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