London - European shares bounced back on Tuesday, lifted by strong company results and news of acquisitions after falling in the previous five sessions on concerns over China's growth.
The FTSEurofirst 300 index of top European shares was 0.4 percent higher at 1,536.23 points by 08h04 GMT after hitting a two-week low in the previous session. The broader STOXX Europe 600 index also rose 0.4 percent.
Shares in Kering surged 6.6 percent after Gucci, the flagship brand of the French luxury and sportswear group, posted a 4.6 percent rise in underlying second-quarter sales.
RSA Insurance Group surged 11.3 percent after Zurich Insurance said it was weighing up a bid for the British group with a market capitalisation of 4.4 billion pounds ($6.9 billion). Zurich fell 3 percent.
Melrose jumped 10.7 percent after saying it would sell its Elster business to Honeywell for 3.3 billion pounds ($5 billion), while engineering firm GKN gained 7.8 percent after agreeing to acquire Netherlands-based Fokker Technologies for 706 million euros to strengthen its position as a supplier to aeroplane makers.
“The market has been preoccupied with uncertainties related to China in the last couple of days, but those concerns are taking a backseat today and equities are getting some support from company earnings and M&A,” Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.
In the past five days, concerns about China's growth dominated the market. Shanghai shares fell again on Tuesday even after Beijing pledged to lend support. Stocks sank 8 percent on Monday.
“We are in an environment where you have a lot of volatility in the market and there is a Federal Reserve meeting, which may provide further hints about a US rate hike cycle. The market is still in a wait-and-see attitude,” Schwarz said.
Investors awaited the two-day US Federal Reserve meeting beginning later in the day, with some expecting that the central bank will make its case for hiking rates as early as September.
Germany's Gerresheimer jumped nearly 15 percent to a record high after the company said it will buy US pharmaceutical packaging company Centor, expanding its footprint in the largest primary pharma packaging market.
Norwegian oil major Statoil rose 2.3 percent after posting second-quarter adjusted operating profit that was better than forecast and maintained its quarterly dividend.
British power producer Drax, which has converted some of its power plant capacity to run on cleaner biomass, rose 12 percent after saying it has started a strategic review of its business after the government indicated changes to renewable energy subsidies.
Reuters