Europe: shares rise as sentiment improves, Italian banks rally

[LONDON] European shares rose on Tuesday to their highest since the end of February as sentiment on tensions between the US and Russia eased and attention shifted to deal-making and first-quarter earnings season.

The pan-regional Stoxx 600 index rose 0.8 per cent, while other European benchmarks also rose, boosted in afternoon trading by strong gains on Wall Street.

Earlier in the day, however, data from China gave a mixed picture of the country's economic health. Growth hit 6.8 per cent in the first quarter but separate figures showed March industrial output missed expectations.

"After a calming of geopolitical concerns and optimism about the Q1 earnings season, mixed data from China may revive queries about the strength of the world's No. 2 economy,"Accendo Markets analysts Mike van Dulken and Artjom Hatsaturjants told clients.

Italian banks rallied, up 1.7 per cent after the country's biggest lender, Intesa Sanpaolo, agreed a sale of bad loans that investors said could help other banks to achieve better terms and boost lending.

"We have now finally turned the corner on the aggregate amount of NPL (non-performaing loan) exposure in Italy," said Pierre Bose, head of European strategy at Credit Suisse Wealth Management.

Shares in Sweden's Intrum Justitia, which bought Intesa's loans, rose 8 per cent.

Elsewhere, AB Foods advanced by 4.1 per cent after meeting results expectations with a resilient performance at its Primark fashion business and a previously flagged reduction in sugar revenues.

Casino rose 1.3 per cent after the French supermarket chain reported a 3.1 per cent rise in first-quarter sales that reflected stronger performance in its Geant Casino hypermarkets and in Brazil despite food inflation.

Sanofi firmed by 0.6 per cent after the French healthcare group announced exclusive talks to sell its Zentiva European generics drugs arm to private equity firm Advent International for 1.9 billion euros (S$3.14 billion).

Still on the French M&A front, Lagardere, the French media group with assets including Paris Match magazine and Europe 1 radio, rose 1.2 per cent after it said it would sell some eastern European radio assets to Czech Media Invest.

REUTERS