European shares rose for the seventh day

European shares rose for the seventh day, its longest winning streak in almost six months, better than forecast U.S. retail sales offset the decline in basic shares resources and automakers.

Air France-KLM and Deutsche Lufthansa AG rose to Credit Suisse Group AG upgraded the airlines. ProSiebenSat.1 Media AG lost 5.7 percent as Die Welt reported that the owners of the largest private broadcaster in Germany to sell the company in 2011. Outokumpu Oyj sank 5.4 percent after saying the fourth quarter will be weaker than previously expected. European car manufacturers posted the worst performance among 19 industry groups.

The benchmark Stoxx Europe 600 Index advanced 0.2 percent to 277.65 closing at 4:30 pm in London, having declined to 0.3 percent. The indicator has been met for seven days to the highest level in over two years, China has refrained from raising interest rates when inflation in the second world's largest economy rose.

"It is very quiet as investors positioned themselves now," said Matthias Jasper, head of equities at WGZ Bank AG in Düsseldorf. "Investors are unwilling to assume additional risks at the moment. The shares are still more attractive than other asset classes and strategically you have to be overweight shares next year."

Federal Reserve officials probably will not make any change in the size of the stimulus when they meet today in Washington last year, according to 38 of 39 analysts in a survey of December 7-8. Fed chairman, Ben S. Bernanke, in an interview released on December 5, told CBS Corp. s' "60 Minutes" that recovery can not be self-sustaining and further purchases of debt beyond the $ 600 million approved by the central bank through June is "certainly possible."

U.S. retail sales

The U.S. retail sales rose more than expected in November as the holiday shopping season got underway, a report showed today. Purchases rose 0.8 percent after a gain of 1.7 percent in October, which was higher than previously estimated, show figures from the Department of Commerce. The median forecast of economists surveyed by us called for an increase of 0.6 percent.

German investor confidence improved for the second consecutive month in December as recovery in Europe's biggest economy showed signs of enlargement. The ZEW Center for European Economic Research in Mannheim said its index of investor expectations and analysts rose to 4.3 from 1.8 in November. Economists predicted a gain of 3.9, according to the median of 36 forecasts in a survey.

U. K. House Prices

An indicator of the housing market in the UK remained near its lowest level in 18 months in November decreased housing demand, the Royal Institution of Chartered Surveyors said.

Belgium had the prospect of lowered debt rating from stable to negative in the Standard & Poor's by the country's political impasse makes it vulnerable to rising borrowing costs.

Analyst estimates compiled by us show annual revenue growth in Europe will average 46 percent in 2010 and 2011, more than any time in the last seven years. The performance gains for Stoxx 600 companies, or profit as a percentage of share price, is 6.53 percent. That is 3.6 percentage points higher than the yield on the benchmark German 10-year government.

"We'll see continued growth in 2011 earnings," said Ian Scott, London-based strategist at Nomura Holdings Inc., at a conference in Frankfurt. "Business is very profitable, however, the market is not paying for it."

National benchmarks rose in 11 of the 18 western European markets. The French CAC 40 Index increased 0.3 percent. Britain's FTSE 100 Index gained 0.5 percent, while Germany's DAX index fell below 0.1 percent.

Air France, Lufthansa

Air France and Lufthansa rose 1.4 percent to 14.40 euros and 1.7 per cent to € 17.34, respectively. The two airlines were raised to "overweight" from "neutral" by Credit Suisse.

Mediaset SpA, the station owned by Silvio Berlusconi, rose 3.3 percent to 4.64 euros after the Italian prime minister survived a confidence vote rebel lawmakers could not muster enough support to topple his government.

TUI AG rose 5.1 percent to 9.83 euros the German owner of the largest travel company in Europe said its earnings in Hapag-Lloyd increased its operating profit for the year. Hapag contributed € 150 million (200.9 million U.S. dollars) in net income compared with a loss of 174 million euros a year earlier, Hanover, Germany-based TUI said today.

BP rises

BP Plc gained 3.2 percent to 473.1 pence, as the international oil companies sold camps in Pakistan to Hong Kong, the investment group United Energy Group Ltd., as part of its plan to pay for spill Gulf of Mexico oil.

Vestas Wind Systems A / S rose 4.7 percent to 181.90 crowns. The company won an order for 30 turbines V52-850 kW model for a project in Cape Verde, the company said.

Vilmorin & Cie gained 3.3 percent to € 85.75 after the second largest seed company in Europe was raised to "overweight" from "underperform" from CA Cheuvreux.

ProSiebenSat fell 5.7 percent to € 21.68 for the biggest drop in the Stoxx 600 after newspaper Die Welt reported that Kohlberg Kravis Roberts & Co. and Permira LLP goal of selling the chain next year. Die Welt quoted unidentified people in the financial markets.

Outokumpu fell 5.4 percent to 13.10 euros after forecasting Finnish stainless steel manufacturer that fourth-quarter operating profit will be "significantly negative" instead of near breakeven, the company said.

ThyssenKrupp, Acerinox

basic resources shares had the second worst performance among 19 industry groups in the Stoxx 600, falling 0.7 percent. ThyssenKrupp AG, Germany's largest steelmaker, fell 1.5 percent to € 31.16, while Acerinox SA retreated 1 percent to € 11.83.

German car manufacturers rate decreases by a measure of European car manufacturers. Volkswagen AG, the largest European automaker, lost 1.9 percent to € 128.90. Bayerische Motoren Werke AG and Daimler AG, the world's largest maker of luxury cars, fell 1.5 percent to € 62.47 per cent and 1.2 to 54.11 euros, respectively.

Allied Irish Banks Plc fell 4.6 percent to 43.9 cents, erasing yesterday's breakthrough. The Dublin-based lender, which is being rescued by the government, decided not to pay bonuses to some employees in its unit market following a letter he received from Finance Minister Brian Lenihan.

Meetic SA, the operator of a dating website, plunged 13 percent to € 16.87 of the founder and CEO Marc Simoncini abandoned plans to sell the company. On the other hand, actions are reduced to "underperform" from "outperform" from Cheuvreux.