Paris - European shares inched higher in early trade on Monday following the previous session's sharp sell-off, although mining shares dropped again, hurt by soft Chinese macro data.
French telecom shares sharply rallied, with Iliad up 13.6 percent, Bouygues up 7.1 percent and Orange up 4 percent, after Bouygues's telecom unit agreed to sell its mobile network and much of its spectrum to Iliad as a way to head off competition regulators' concerns about its pending bid for Vivendi's SFR unit.
Robin Bienenstock, analyst at Bernstein Research, said that a combination of SFR and Bouygues would lift the entire sector, leaving out only cable operator Numericable, which had also bid for SFR. Numericable shares fell 10 percent on Monday.
“We think that this is the best deal for Vivendi, Bouygues, Iliad and Orange, easing price pressure in both wireless and wireline,” Bienenstock wrote in a note.
At 0835 GMT, the FTSEurofirst 300 index of top European shares was up 0.1 percent at 1,327.33 points. It had tumbled 1.5 percent last week, knocked by tensions in Ukraine.
Mining shares slid again, however, hurt by Chinese data showing a surprisingly sharp drop in exports which tipped the country's trade balance into a deficit.
The STOXX Europe 600 basic resources index was down 1.7 percent following its 3.5 percent slump on Friday.
Rio Tinto was down 1.4 percent and BHP Billiton down 2 percent. The STOXX basic resources index has tumbled 9 percent since mid-February.
“Chinese figures, together with some news on renewed tensions in Crimea, have equity markets on the defensive,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets.
Around Europe, Britain's FTSE 100 index was up 0.1 percent, Germany's DAX index down 0.4 percent, and France's CAC 40 up 0.5 percent.
“Germany is hurt a bit more than the others as it is an exporter nation with vast interests in both Central Europe and China,” Gijsels said.
“However, in the larger scheme of things this is probably a healthy correction. We see this as a little pause and not the end of the bull market and remain buyers of the dip.”