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Gains at E.ON and Swiss Life lift European equities
August 13, 2014 / 4:29 PM / 3 years ago

Gains at E.ON and Swiss Life lift European equities

* E.ON and Swiss Life rise as results beat forecasts

* Nagging worries over Ukraine crisis limit gains

* FTSEurofirst 300 closes up 0.4 pct at 1,325.46 points

By Sudip Kar-Gupta

LONDON, Aug 13 (Reuters) - European stock markets recovered ground on Wednesday, lifted by gains in the shares of utility E.ON and insurer Swiss Life after forecast-beating results.

However, economic sanctions over Ukraine and the broader risks posed by conflict between Kiev’s forces and pro-Russian separatists limited the market’s rebound from a recent sharp slide.

Investors are also worried that Europe’s economic recovery remains muted. Ukraine tensions were assigned some of the blame for data that showed an unexpected contraction in euro zone industrial production in June.

The pan-European FTSEurofirst 300 index, which had hit a 6-1/2 year high in late June but then fell back some 5 percent due to the Ukraine crisis, closed up by 0.4 percent at 1,325.46 points.

A 4.8 percent rise at E.ON gave one of the biggest lifts to the FTSEurofirst 300.

Even though E.ON posted a drop in interim profits, with a warning the Ukraine crisis would hurt its Russian earnings, its shares rose as the results beat analysts’ forecasts.

Swiss Life also surged 7.1 percent after Switzerland’s largest dedicated life insurer beat expectations with a slight rise in first-half net income, buoyed by a strong performance in its home market.

Traders for now were still betting that the Ukraine crisis would not escalate much further.

“The market went down too far, too fast. I‘m a buyer at these levels,” Zurich-based ACIES Asset Management hedge fund trader and principal, Andreas Clenow, said. “I think neither side has an interest in a prolonged fight.”

Francois Savary, chief investment officer at Swiss bank Reyl, said: “We are watching the situation very carefully. You never know, suddenly the situation may change, but I do not think (Russian President Vladimir) Putin will go for a full military intervention.”

Europe bourses in 2014:

Asset performance in 2014:

Today’s European research round-up (Additional reporting by Blaise Robinson; Editing by Louise Ireland/Ruth Pitchford)

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