EADS, miners lift Europe shares; UK banks lag

By Sitaraman Shankar

LONDON, May 14 (Reuters) - European shares rose on Wednesday as takeover talk boosted miners and strong results powered aerospace and defence group EADS (EAD.PA: Quote, Profile, Research), while concern over the need for more rights issues hit British banks.

At 0813 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,354 points.

EADS (EAD.PA: Quote, Profile, Research) jumped 7 percent after first-quarter profit beat expectations and the company confirmed its forecasts for the year, and miners were led higher by BHP Billiton (BLT.L: Quote, Profile, Research), which gained 4.4 percent on talk of Chinese stakebuilding.

Xstrata (XTA.L: Quote, Profile, Research) was up 2.5 percent and Rio Tinto (RIO.L: Quote, Profile, Research) up 1.9 percent.

Telekom Austria (TELA.VI: Quote, Profile, Research) and Italian utility Enel (ENEI.MI: Quote, Profile, Research) also advanced after posting strong results, rising more than 3 percent to rank among the top European gainers.

Analysts said that while the result season had been reasonably strong, there could be weakness ahead.

"Cost pressures are at very elevated levels at the moment, and we will see some disappointments in operating margins in the second half of the year," said Darren Winder, strategist at Cazenove.

"There are signs that the Fed easing is coming to an end and inflation in Europe has been an obstacle ... interest rate forecasts out there may be too demanding," he said.