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European stocks spring higher on reviving reflation trade

Published 25/07/2017, 08:33
© Reuters. Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt
UK100
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DE40
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STOXX50
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LOGN
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UPM
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INF
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CRDA
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SGRO
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AKZO
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DOM
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CPRI
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STOXX
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AMS
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LISN
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CHOO
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SX8P
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SX7P
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SXPP
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LONDON (Reuters) - Strength among commodity firms and banking stocks as well as a string of solid updates boosted European shares in early deals on Tuesday.

Earnings season remains front and centre for equities investors though focus will also be on the two-day U.S. Federal Reserve meeting which gets underway later in the day.

The pan-European STOXX 600 (STOXX) index rose 0.3 percent, bolstered by strength in mining firms (SXPP) and banks (SX7P) while blue chips (STOXX50E) gained 0.4 percent.

Germany's DAX (GDAXI) rose 0.1 percent, and the commodity-heavy FTSE 100 (FTSE) was up 0.5 percent.

Corporate results season gathered steam with British property developer Segro (L:SGRO) and business media group Informa (L:INF) leading STOXX risers after well-received first-half updates, both gaining around 4.5 percent.

Europe's tech sector (SX8P) was also buoyant after iPhone supplier AMS (S:AMS) raised its mid-term revenue target, while computer peripherals and mobile speaker maker Logitech (S:LOGN) also raised its outlook.

Dutch paints maker Akzo Nobel (AS:AKZO) was one of the biggest individual drags on the STOXX, however, falling 1.3 percent after its second quarter profit missed forecasts.

Updates also weighed on paper maker UPM (HE:UPM), chemicals firm Croda International (L:CRDA), chocolate-maker Lindt & Spruengli (S:LISN) and Domino's Pizza (L:DOM), which all fell between 3 percent to 6.5 percent.

While it is still early days for the European second quarter earnings season as only 20 percent of firms have given updates, more than half of those firms have beaten analysts' expectations, according to Thomson Reuters data.

© Reuters. Traders work in front of the German share price index, DAX board, at the stock exchange in Frankfurt

European deal-making also rolled on with U.S. retailer Michael Kors (N:KORS) agreeing to buy luxury shoemaker Jimmy Choo (L:CHOO) for $1.2 billion, sending Jimmy Choo's shares up 16.8 percent to an all-time high.

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