European stocks higher as financials recover

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LONDON, Sept 26 (Reuters) European shares edged up in early trade on Wednesday, recovering from the previous day's losses, with financials including banks paring recent losses.

Shares in Royal Bank of Scotland rose 1 percent after the Financial Times reported a group led by RBS has doubled its stake in ABN AMRO to more than 8 percent, cutting the cost of its takeover bid for the bank by about 1 percent.

By 0715 GMT, the pan European FTSEurofirst 300 index was up 0.5 percent at 1,537.6, paring Tuesday's 1.0 percent fall when weaker-than-expected data stoked economic growth worries. The index is up nearly 4 percent so far this year.

Among losers, shares in Swedish fashion retailer H&M fell 1 percent after it missed pretax profit estimates.

UK mortgage lender Northern Rock jumped 7 percent after it received a number of approaches including a possible offer for the company. It however cancelled its dividend.

''In view of the range of what we consider to be possible values for the shares, from zero to 357 pence, the final outcome for equity shareholders remains opaque,'' analysts at Bear Stearns said in a note.

''Nevertheless, the fact that interested parties are emerging will undoubtedly be taken positively by the market this morning and should, we think, have positive repercussions for the share prices of other UK mortgage providers.'' REUTERS MP GC1416

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