UPDATE 1-European stocks bounce back as strong earnings in focus

  • Reuters
  • Stock Market News
UPDATE 1-European stocks bounce back as strong earnings in focus

* STOXX 600 up 0.5 pct

* Investors shrug off geopolitical worries

* Better outlook boosts Biomerieux

* JM sinks as stakeholder sells out

* Q2 earnings to grow 16 pct year-on-year - TR (ADVISORY- Follow European and UK stock markets in real time on the Reuters Live Markets blog on Eikon - see cpurl://apps.cp./cms/?pageId=livemarkets)

By Helen Reid

LONDON, Aug 30 (Reuters) - Investors piled back into European stocks on Wednesday, boosting indexes higher in a relief rally a day after geopolitical concerns caused a sharp dip across equity markets.

The pan-European STOXX 600 .STOXX gained 0.5 percent, recovering nearly all the ground lost in the previous session when North Korea's missile launch sparked a sell-off. zone stocks and blue-chips .STOXX50E rose in line.

Banking stocks .SX7P , which had led the risk-averse move lower on Tuesday, were the strongest performers, up 0.9 percent, helping Italy's bank-heavy index .FTMIB outperform.

Fears of a more drawn-out correction dissipated, with Credit Suisse (SIX: CSGN ) strategists saying: "Market jitters such as these are unlikely to turn into a longer-term period of outright risk-off sentiment."

Investors' focus turned back to encouraging earnings news on Wednesday, driving gains across all sectors.

Shares in French medical equipment supplier Biomerieux BIOX.PA led gains, jumping 7.8 percent after it raised its 2017 forecasts, bolstered by a strong first half. shares have risen more than 30 percent year-to-date, outperforming the healthcare sector's modest 1 percent gains.

Shares in German broadcaster RTL RRTL.DE pared early gains, up 2 percent after it boosted second-quarter revenue, beating expectations despite an advertising market it called challenging. helped the media sector .SXMP gain 0.6 percent, recovering from its nine-month low hit in the previous session after broadcaster Prosiebensat PSMGn.DE cut its outlook for advertising revenues.

Stronger first-half profit and growing business volume helped Swiss insurer Baloise BALN.S gain 5.2 percent. additional solvency disclosure confirmed the company is strongly capitalised; as such Baloise remains an excellent name for yield-seeking investors," said Baader Helvea analysts, adding however that the stock is not a bargain on valuation.

Broker upgrades also spurred some moves higher.

Finnish elevator company Kone KNEBV.HE jumped 3.2 percent after Morgan Stanley (NYSE: MS ) analysts switched their preference to it over peer Schindler SCHP.S , saying Kone could benefit more from a pick-up in elevator orders in China where it has a leading market position.

Citi analysts' "buy" rating on British online grocer Ocado OCDO.L sent its shares up 2.2 percent.

The U.S. bank's analysts said automation - which Ocado has developed in its warehouses - would become increasingly prevalent, and online grocery shopping would grow.

One weak spot was Swedish property developer JM JM.ST whose shares sank 4.1 percent after Norwegian building association OBOS said it sold all its shares in the firm. European stocks have seen some sharp moves in recent weeks, punctuating an unusually calm year, sell-offs have tended to fizzle out as shares are supported by global investors' continued confidence in the region's economic growth and relatively cheap valuations compared to the U.S. market.

Earnings growth also remained encouraging. With the majority of company reports through, Thomson Reuters data estimated earnings for the STOXX 600 would increase 16 percent year-on-year for the second quarter.

Drop an image here or Supported formats: *.jpg, *.png, *.gif up to 5mb

Error: File type not supported

Drop an image here or