Mixed earnings limit gains for European shares
* FTSEurofirst up 0.3 percent
* Earnings lift airlines
* Investors braced for Wall Street reopening
* BG slumps on production outlook
By David Brett
LONDON, Oct 31 (Reuters) - Mixed corporate earnings capped gains on Europe's top share index by midday on Wednesday as investors awaited the reopening of markets on Wall Street.
The FTSEurofirst 300 rose 2.87 points, or 0.3 percent to 1,105.92 by 1132 GMT.
Among major blue-chip firms posting results, European airlines Air France-KLM and Lufthansa each gained more than 7 percent in brisk volumes after the two companies posted results and outlooks which reassured investors.
Both firm announced cost-cutting measures in order to maintain margins against a depressed macro economic outlook.
Results from its peers helped to lift British Airways owner International Airlines to the top of the FTSE 100 risers list, up 3.5 percent.
There were gains too for Swedish oil company Lundin Petroleum and Norwegian food and industrial conglomerate Orkla, up 2.5 and 1.6 percent respectively after both firms gave bullish updates.
Fifty-six percent of European companies have so far met or beaten albeit drastically lower expectations in the current quarter. Firms on the whole have reported 19 percent growth in earnings in the third-quarter year-on-year, but that has still missed expectations by about 0.4 percent, according to Thomson Reuters Starmine.
An expected bullish start on Wall Street, which is set to reopen after super storm Sandy caused widespread damage on the U.S. eastern coast, has just about kept momentum going in Europe following the previous session's sharp rise.
"Anticipation and return of U.S. to trading post-Hurricane Sandy, after a few days of low volumes and caution, may add some spice to activity, although we're prepared for teething problems as contingency plans are tested to the max," Mike van Dulken, head of research at Accendo Markets, said in a note.
The FTSEurofirst has remained in a 40-point range since early September, having rallied 16.4 percent from June lows.
"The market has disassociated itself from risk. It looks like lower rates and the persistent pledge by the European Central Bank to make sure nothing really bad happens to Spain keeps bolstering the market," Gerry Celaya, chief strategist at Red Tower Research, said.
There was focus on a conference call by euro zone finance ministers on Wednesday on seeking a way to give Greece more time to hit budget and debt targets.
Celaya said Red Tower remains bearish on equities amid persistent doubts over the outlook for the global economy and is waiting for Germay's Dax to correct back to around 6,600 before taking a more bullish stance on the asset class.
There might have been better gains on the FTSEurofirst index had heavyweight British oil and gas firm BG Group not slid 13 percent after it disappointed the market by saying it did not expect to grow production next year.
There was disappointment too for UK bank Barclays, already rocked by an interest rate-rigging scandal. It fell 4.3 percent after it unveiled two new U.S. regulatory investigations into its financial probity and said third quarter profits fell by a fifth due to charges for the mis-selling of insurance.
Despite a slightly more bullish quarter with 63 percent of banks meeting or beating expectations, the sector as a whole has so far seen earnings contract by around 21 percent as it deals with the fallout of the debt crisis.
Swedish Match extended the previous session's losses, falling 5.2 percent as banks began cutting ratings and forecasts on the tobacco products group after weak earnings, with Nomura cutting its recommendation to "neutral".
Away from results, Tullow Oil, up 2.8 percent, confirmed media reports by announcing it had successfully encountered oil at its Twiga south-1 exploration well in Kenya.
Luxury goods firm Christian Dior rose 2.6 percent with traders citing a report in the Daily Mail newspaper that its minorities are set to be bought out by parent LVMH .
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