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European Stocks Rise on Positive Corporate News

Stocks in this article: IHG

LONDON ( The Deal) -- European stocks rose on Tuesday after positive news from some major companies distracted investors from external risks.

In London, the FTSE 100 was up 0.46% at 6,707.42. U.K. data from Markit Economics and the Chartered Institute of Purchasing & Supply showed forecast-busting growth in the services sector in July.

In Frankfurt, the DAX rose 0.50% to 9,199.51. The CAC 40 in Paris increased 0.47% to 4,237.87.

In Paris, shares in Vivendi rose more than 3% after Telefonica offered to buy Vivendi's Brazilian telecom and broadband provider GVT for $8.9 billion, including shares in the enlarged company that would be created through merging the business with Telefonica's Vivo wireless services unit. It's also offered Vivendi the chance to buy its 8.3% stake in Telecom Italia. Vivendi said its businesses aren't for sale even though it tried unsuccessfully to sell GVT last year. But it promised its supervisory board would assess the offer.

Telefonica shares in Madrid fell more than 1%.

Also in Paris, shares in lender Credit Agricole rose over 6% as investors decided its second-quarter performance showed strength if excluding a 708 million euros ($948.1 million) write-down related to its stake in Portugal's Banco Espirito which almost obliterated net profit. The Deal's Laura Board has Tuesday's Global Markets Report from London:


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In Frankfurt, Bayerische Motoren-Werke was up more than 1% after a second-quarter earnings report beat forecasts, and Deutsche Post also gained almost 2% on positive second-quarter earnings news and an increase in its full-year forecast.

But construction and infrastructure services company Bilfinger plunged after issuing its second profit warning in little over a month.

In London, Intercontinental Hotels Group  (IHG) fell more than 2% after posting an 18% decline in first-half pretax profit to $377 million. It said margin growth will be lower in the full year than in the first half.

The hotels operator has become a target of activist investor Marcato Capital Management, which has built a 4% stake and on Monday said it had hired Houlihan Lokey to conduct a review of the business. Marcato wants Intercontinental Hotels to sell itself -- Sky News reported it May that it had received and rejected a takeover proposal from an unnamed U.S. suitor.

Intercontinental Hotels said its own strategic review of its portfolio is progressing well. That review has led to various disposals already and several returns of cash to shareholders.

Defense engineering company Meggitt fell sharply after reporting first-half revenue down 11% at 718.9 million pounds ($1.2 billion) and a 21% decline in pretax profit to 143.8 million pounds. It said military revenue was weaker than expected.

In Tokyo, the Nikkei 225 fell 1% to 15,320.31 as shares in exporters declined.

In Hong Kong, the Hang Seng rose 0.20% to 24,648.26. The Markit Economic/HSBC Holdings Purchasing Managers' Index for the services sector in China slipped to 50 from July from 53.1, right on the threshold between expansion and contraction.

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