Irish Life & Permanent upgraded; France Telecom downgraded By Sarah Turner, MarketWatch LONDON (MarketWatch) -- Results from Spanish retailer Inditex and some improvement in sentiment towards the banking sector helped push Europe stocks higher Thursday in the first advance during a turbulent week. The pan-European Dow Jones Stoxx 600 index (ST:SXXP 243.52, +2.10, +0.87%) rose 0.9% to 243.64, after losing 3.1% over the first three sessions of the week as ongoing concerns about debt levels were exacerbated by credit agency rating and outlook downgrades. Greece, Spain and Portugal each have either seen their sovereign ratings downgraded or have been warned by a rating agency that they could be downgraded. Banks took the brunt of that fall in Europe but were putting in a better performance on Thursday, with Credit Agricole (FR:ACA 13.47, +0.37, +2.83%) shares up 2.9% and UBS (CH:UBSN 16.11, +0.45, +2.87%) (UBS 15.34, -0.20, -1.29%) shares up 2.9%. Hard-hit Greek lenders also recovered, with Alpha Bank rising 3.8% and National Bank of Greece (NBG 5.05, -0.40, -7.34%) adding 3.4%. Analysts at Nomura Securities acknowledged the macro economic risks for the Greek banking sector but said that the recent sell-off represents a buying opportunity. "We do not anticipate any of the Greek banks we cover facing liquidity issues, we believe they are well capitalized and we still estimate a recovery in return on equity in 2011," the analysts said as they resumed coverage of Alpha Bank with a neutral rating. Overall, the U.K. FTSE 100 index (UK:UKX 5,231, +27.22, +0.52%) climbed 0.5% to 5,231.05, the German DAX index (DX:DAX 5,688, +40.56, +0.72%) added 0.7% to 5,689.21 and the French CAC-40 index (FR:PX1 3,786, +28.94, +0.77%) added 0.7% to 3,784.10. Futures on the Dow Jones Industrial Average added 24 points. Other gainers included Spanish retail giant Inditex (ES:ITX 42.20, +0.93, +2.25%) , up 2.1%. The firm reported a 1% drop in nine-month profit to 831 million euros ($1.22 billion) that nonetheless exceeded analyst expectations for a profit of 814.8 million euros. See Inditex story. Irish Life & Permanent (IE:ILB 3.27, +0.02, +0.55%) shares rose 1.5% after the provider of personal financial services, was upgraded to buy from hold at Citigroup. "While vulnerable to a 'double dip' recession, the shares could offer material upside if a 'steady state' is achieved," Citigroup said in a note to clients. "The balance of probability leads us to view this as the eventual outcome, although the journey may be turbulent," the broker added. It wasn't all good news on the broker front, particularly for French companies. Shares of Publicis Groupe (FR:PUB 26.94, -0.40, -1.45%) fell 1.4% after the Paris-based advertising and media group was downgraded to neutral from overweight at J.P. Morgan, which said the share price upside potential is not big enough to justify an overweight rating. France Telecom (FR:FTE 17.07, -0.11, -0.64%) (FTE 25.66, -0.12, -0.47%) , down 0.5%, was cut to underperform from neutral at Exane BNP Paribas, with the broker saying that it expects further downgrades to earnings estimates due to risks for French operations. "We see limited downside on the stock on an absolute basis given its 8.2% dividend yield - the 1.40 euros a share dividend is sustainable in our view - but we see more attractive investment propositions elsewhere," the broker said.

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