UPDATE 2-Buoyant media sector boosts European shares

  • Reuters
  • Stock Market News
UPDATE 2-Buoyant media sector boosts European shares
Credit: © Reuters.

* STOXX 600 up 0.8 percent

* Sky rallies as takeover war escalates

* ITV down after England's World Cup defeat, TF1 gains

* Earnings updates in focus (Adds closing prices)

By Danilo Masoni

MILAN, July 12 (Reuters) - A buoyant media sector drove European stocks higher on Thursday following a new bid for British pay-TV firm Sky SKYB.L , helping shares stabilise after heavy losses in the previous session, when fears of an escalating trade war hit markets.

The pan-European STOXX 600 .STOXX index closed 0.8 percent higher with gains in the healthcare and consumer sectors, which have recently been favoured for their defensive qualities in the face of worries that a trade war could hurt global growth.

The region's media index .SXMP rose 2.4 percent, with Sky up 3.4 percent after U.S.-based Comcast CMCSA.O submitted a $34 billion bid for the group a few hours after Rupert Murdoch's 21st Century Fox raised its offer. traded above Comcast's recommended offer price of 14.75 pounds as investors bet Fox would make another higher bid.

"Fox has spent 18 months going through the UK regulatory process to acquire Sky and we don't believe 1400p is likely to be its final offer," Credit Suisse (SIX: CSGN ) analysts led by Matthew Walker said in a note.

They lifted their price target on the stock to 16 pounds.

Europe's media index has outperformed the market this month, underpinned by the bidding war for Sky but also helped by expectations of a lift to advertising sales from the World Cup soccer matches for broadcasters such as France's TF1 and Britain's ITV.

ITV ITV.L however fell 1 percent on Thursday after England lost its semi-final with Croatia, who will now face France in Sunday's final. Sachs said the World Cup boost for ITV was already priced in and it downgraded the stock to neutral, while lifting its rating on TF1 TFFP.PA to buy, which helped send the stock up 3.7 percent. operators had a strong session with France's Eutelsat ETL.PA announcing it was joining rivals Intelsat I.N and SES SESFg.LU in a proposal to free up spectrum for the rollout of 5G mobile networks in the United States.

Eutelsat rose 3.4 percent and SES SESFg.LU , which benefited from an upgrade from Exane BNP Paribas (PA: BNPP ), rose 1 percent.

Elsewhere earnings updates drove share price moves.

Gerresheimer GXIG.DE rallied 7.6 percent after the German drugs packaging maker raised the lower end of its revenue growth guidance and unveiled a 350 million euro acquisition to expand in the field of digital drug delivery devices. bank DNB DNB.OL dropped 4 percent after its second quarter earnings fell short of expectations. investors are expecting a solid earnings season in Europe. According to the Thomson Reuters IBES data, second-quarter earnings for the companies on the euro zone's MSCI EMU index .dMIEM00000PUS are expected to grow 8.1 percent.

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