LONDON, Dec 10: Europe’s main equity markets gained slightly on Monday as the banking sector reacted reassuringly to company announcements linked to the global credit squeeze.

London’s FTSE 100 index of leading companies rose 0.20 per cent to 6,568.00 points in late morning trade. Franfurt’s DAX 30 won 0.33 per cent to 8,020.11 points and in Paris the the CAC 40 gained 0.22 per cent to 5,731.29.

The DJ Euro Stoxx 50 index of top eurozone shares increased by 0.29 per cent to 4,459.42 points.

The European single currency stood at $1.4686.

They said better-than-expected domestic machinery orders data had not provided much of a boost for shares following Friday’s mixed session on Wall Street after news of moderate US job gains in November.

In Europe, all eyes were on Swiss banking giant UBS, which said on Monday that Singapore’s state investment arm was to provide it with nearly 10 billion dollars (6.81 billion euros) of capital.

This would plug a huge write down by the bank for losses incurred in the US subprime mortgage crisis and resulting credit crunch.

UBS, a leading name in both Swiss and international banking, also warned it risked posting a net loss for the full year 2007 as a result.

In early afternoon trading, the share price in UBS was showing a rise of 2.88 per cent to 58.85 Swiss francs. The Swiss Market Index climbed 0.54 per cent to 8,847.40 points.

UBS are trying to draw a line under their subprime exposure by announcing a 10 bln usd writedown, said a trader with a major European brokerage.

US broker Merrill Lynch noted: In our view this doesn’t completely remove the debate on further write-downs, but it establishes UBS as the most conservatively marked.

In London meanwhile, the fifth-biggest British bank Lloyds TSB surged 3.79 per cent to 506.5 pence after the group said it was on course to meet analysts’ expectations for a 12-per cent increase in full year profit.

The bank added that the fallout from the global credit squeeze has cost the company about 200 million pounds (278 million euros, 408 million dollars).

Like many other financial institutions, the group has been affected by the recent market dislocation, Lloyds TSB said in a trading update.

However, due to our lower risk strategy, the impact has been limited to approximately 200 million pounds at 31 October 2007.

In recent months, banks around the globe have become increasingly nervous about lending cash to each other amid fears over possible exposure to the US housing market slump, creating a so-called credit crunch.—AFP