European shares bounce back, get earnings boost

Reuters - UK Focus

* FTSEurofirst 300 rises 0.4 percent

* Alcatel (Paris: FR0000130007 - news) -Lucent surges after results

* Focus on ECB, BoE (Shenzhen: 000725.SZ - news) policy meetings

By Atul Prakash

LONDON, Feb 6 (Reuters) - European equities climbed higherin cautious trading ahead of rate decisions by central banks onThursday, with reassuring earnings results from major companiessuch as Alcatel-Lucent and AkzoNobel boosting their shares.

Telecoms equipment maker Alcatel-Lucent surged 9.5percent after seeing encouraging results from its cost-cuttingmeasures, a tweaked product offering and asset sales. It missedconsensus revenue forecasts, but its gross margin and operatingprofit beat expectations.

Dutch paints and chemicals firm AkzoNobel rose 6.6percent after reporting higher-than-expected earnings and sayingit would meet its 2015 targets.

But some companies disappointed investors on the earningsfront. Drugmaker AstraZeneca fell 3.1 percent aftersaying it expects earnings to continue to fall in 2014.

"The earnings season has been mixed. Possibly we will someeasing of the downward revisions to 2014 earnings estimates, butwe have to be aware that a double-digit earnings growth thisyear is a little bit ambitious," said Gerhard Schwarz, head ofequity strategy at Baader Bank (Xetra: BWB.DE - news) .

"We have seen a hefty decline (in European shares), butoverall we should not be too much worried because thefundamentals of the market have not changed much. The outlookfor the equity market is staying constructive, but we need to becautious."

At 0904 GMT, the FTSEurofirst 300 index of topEuropean shares was up 0.4 percent at 1,277.49 points.

Investors avoided strong bets ahead of a European CentralBank meeting. Following a recent surprise fall in inflation,pressure has risen on the ECB to ward off the risk of the eurozone slipping into deflation. The Bank of England also holds ameeting, but is likely to keep rates unchanged.

Analysts said a message from the ECB that it stands ready toact should things deteriorate from here would reassure investorsand support stock markets.

The FTSEurofirst 300 index had tumbled 6 percent in the pasttwo weeks, its sharpest pull-back in seven months. The slide wassparked by tepid U.S. and Chinese manufacturing data as well asconcerns over the impact on emerging market assets of reducedstimulus from the U.S. Federal Reserve.

Europe bourses in 2014:

Asset performance in 2014:

Today's European research round-up [RCH/EUROP

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