[MILAN] European shares ended slightly higher on Tuesday, supported by firmer oil prices and encouraging company results, with pulp and paper maker UPM and oil major BP rallying on better-than-expected figures.
UPM surged 9 per cent, the second biggest gain in the pan-European FTSEurofirst 300, after reporting a 34 per cent rise in adjusted operating profit in the first quarter.
"In Europe, local bourses are in the black, mostly on the back of a rebound in crude oil prices contributing to the markets risk-on sentiment and on positive corporate earnings surprises from several companies," Oanda currency strategist Dean Popplewell said in a note.
The pan-European FTSEurofirst 300 index, which closed 0.6 per cent lower on Monday after hitting a three-month high in the previous week, ended 0.2 per cent higher.
The European oil and gas index rose 1.1 per cent after oil advanced on a weaker US dollar and a flood of new cash into the market, although some analysts warned of increased output from Saudi Arabia and Iran.
Shares in BP rose 4.3 per cent. The company's profit dropped 80 per cent in the first quarter but beat analysts' expectations. BP also held its dividend and said it could cut capital spending further.
"It appears the result was positively impacted by better availability, lower costs and importantly a better trading result," RBC analysts said in a note.
Banks rose 2.5 per cent, making them the top sectoral gainer. Standard Chartered soared 9.8 per cent after it posted stronger-than-expected first quarter results and said restructuring costs were in line with its plans.
The earnings season is gaining momentum in Europe. According to Thomson Reuters StarMine data, 16 per cent of companies in the STOXX Europe 600 have reported results so far, of which half have met or beaten analysts' forecasts.
On the downside, Air Liquide shares fell 4.8 per cent after the industrial gases supplier posted an unexpected drop in first-quarter sales.