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European Stocks Rise on Strong Manufacturing Data

Stocks in this article: UL NOK

LONDON ( The Deal) -- European stock indices reversed early losses to move higher on Thursday after positive manufacturing data pointed to a eurozone recovery.

In London, the FTSE 100 was up 0.15% at 6,808.27 by mid-morning local time. In Frankfurt, the DAX rose 0.37% to 9,789.43. In Paris, the CAC 40 climbed 0.65% to 4,404.96.

The Markit Economics Purchasing Managers' Index for the eurozone in July came in slightly ahead of expectations, and rose from the June reading. The same index in China, where it is compiled with HSBC Holdings, also came in ahead of expectations.

In the U.K., June retail sales growth fell below forecasts, easing pressure on the Bank of England to raise rates from a historic low 0.5%.

The corporate news flow was mixed but investors during the course of the morning revised their initial glass-half-empty view of several company bulletins.

In London and Amsterdam, Unilever (UL) initially fell but then stabilized after posting below-forecast second-quarter underlying sales growth of 3.8%. In the first half, revenue rose 5.5% to 24.1 billion euros ($32.5 billion) and net profit rose 12% to 3 billion euros following disposals. The company said growth is still slowing in Asia and other emerging markets and that developed markets remain weak, "with little sign of any recovery in North America or Europe."

Sugar producer Tate & Lyle also recovered losses it sustained after reporting of a "challenging" first quarter, when it faced a triple whammy of a harsh U.S. winter, a factory shutdown in Singapore following an industrial accident, and a strong rise in sterling. It said supply constraints because of the factory shutdown will hit first-half earnings, though it said full-year results, before currency fluctuations, will be in line with previous guidance.

But London-listed electronics distributor Electrocomponents tumbled almost 6% after its second-quarter business update showed U.K. sales had fallen and overall gross margins had edged lower.

In Frankfurt, shares in chemicals maker BASF were down more than 2% after second-quarter earnings came in below analysts' forecasts. Net profit was 1.3 billion euros, a rise of 124 million euros, while operating profit increased 12% to 2.1 billion euros. The company, which stuck with its full-year forecast for a "slight increase" in operating profit, said the devaluation of almost all major currencies against the euro hit earnings by about 200 million euros.

In Paris, oilfield services company Technip slumped more than 6% on news of a 2.9% decline in second-quarter net profit. The company raised its full-year revenue forecasts for both its subsea and onshore/offshore divisions but warned that its oil industry clients were still being selective about investing.

But software maker Dassault Systemes was up almost 6% after it agreed to buy business planning software company Quintiq to enter the market serving the metals, mining, oil and gas, rail delivery and freight industries for the first time. It is spending about 250 million euros on the Netherlands and U.S.-based company.

One of the leading gainers in Europe was Finland's Nokia (NOK), which was up more than 7% in Helsinki after issuing second-quarter figures which showed operating profit at its core networks business had fallen less than expected to €281 million and after raising its full-year outlook for that division.

In Sydney, Newcrest Mining closed down 5.2% as it warned of a writedown of up to A$2.5 billion ($2.4 billion) in full-year results to be announced last month. The writedown mainly relates to to a Papua New Guinea mine that it acquired with its $9 billion takeover of Lihir Gold in 2010. The writedown may include properties in Ivory Coast and Australia.

In Hong Kong the Hang Seng closed up 0.71% at 24,241.50. In Tokyo, the Nikkei 225 slipped 0.29% to 15,284.42.

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