European shares recover, boosted by ARM, BP

Tue Feb 5, 2013 3:16pm IST

* FTSEurofirst 300 up 0.4 percent

* BP, ARM rise on Q4 profits beats

* KPN slides after rights issue announcement

By Tricia Wright

LONDON, Feb 5 (Reuters) - European shares rose on Tuesday, recovering after the previous session's sharp sell-off as investors digested a raft of earnings reports, with ARM and BP both gaining strongly.

British chip designer ARM was among the top FTSEurofirst 300 risers, climbing 3.7 percent after it unveiled a better-than-expected rise in pretax profit in the fourth quarter, boosted by rising sales of smartphones and tablets using the firm's technology.

"Their sales were well ahead of consensus ... but I will not be chasing the stock at these levels. I'll look to buy them on the dip," Hartmann Capital trader Basil Petrides said.

BP advanced 1.9 percent, adding most points to the index after its fourth-quarter profits exceeded analysts' expectations, helped by a record performance from its refining division.

Sector peer BG Group, however, was a major drag, off 1.7 percent, as it warned it would miss a medium-term production target.

The FTSEurofirst 300 was up 0.4 percent at 1,155.98 by 0922 GMT, having dropped 1.5 percent on Monday as mounting political uncertainty in the euro zone's big debtor countries prompted investors to lock in profits on indexes trading close to multi-year highs.

Traders and strategists said the previous session's weakness could be viewed as a buying opportunity.

"I think a lot of people recognise there is a lot of value in the markets," Toby Campbell-Gray, head of trading at Tavira Securities, said.

Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, said: "Our working hypothesis remains that after the correction the trends in place before will continue as the two main drivers are still there, namely central banks continuing to inject liquidity and more and more proof of an economic recovery somewhere between Q1 and Q2."

KPN KNOCKED

KPN topped the FTSEurofirst 300 fallers' list, off 22 percent after the Dutch telecoms group announced plans to cut its debt with a 4 billion euro ($5.4 billion) cash call to shareholders, as it posted a fourth-quarter net loss.

Trading volume in KPN was robust, at 240 percent of its 90-day daily average, against the FTSEurofirst 300 on around 30 percent of its average.

Tele2 was another significant faller, down 9.7 percent, after warning of slower growth in Sweden and Russia this year after the Nordic and emerging markets telecoms group reported lower than expected fourth-quarter earnings.

Trading volume in Tele2 stood at 332 percent of its 90-day daily average.

The fourth-quarter earnings season in Europe has got off to a mixed start. Of the 19 percent of companies to have reported, 65 percent have beaten or met expectations, but with a quarterly year-on-year contraction of 12.3 percent, according to Thomson Reuters Starmine data.

Reuters Showcase

Legal Complaints

Legal Complaints

Government's payday from telecoms auction could be delayed  Full Article 

Running State Banks

Running State Banks

India signals private-sector bosses could run state-owned banks  Full Article 

India Forecast Raised

India Forecast Raised

S&P raises India's GDP forecasts, says it's a bright spot in Asia  Full Article 

StanChart CEO

StanChart CEO

StanChart picks ex-JPMorgan exec Winters as CEO to replace Sands  Full Article 

Wockhardt Plant

Wockhardt Plant

Wockhardt says FDA raises new concerns about Waluj plant  Full Article 

Banking Sector

Banking Sector

State-owned banks' capital needs may be higher - RBI deputy  Full Article 

Shares Sale

Shares Sale

Bharti Airtel says raised $310 mln through share sale in tower unit  Full Article 

Inflation Target

Inflation Target

India should meet RBI inflation target by Jan 2016 - RBI deputy  Full Article 

International Exchange

International Exchange

NSE plans to set up international exchange in Gujarat  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage