SAB, Raiffeisen help European shares edge higher after results

Thu May 22, 2014 3:58am EDT

* FTSEurofirst 300 up 0.2 pct

* France's CAC underperforms after weak data

* Dovish Fed underpins sentiment

* SABMiller, Raiffeisen rally after results

By Francesco Canepa

LONDON, May 22 (Reuters) - European stocks edged higher on Thursday, boosted by strong results from drinks group SAB Miller, deal activity among tobacco companies and expectations of further monetary support from the Fed.

Shares in SABMiller rose 3.7 percent after the company behind Peroni beer reported a 1 percent rise in full-year earnings, which traders said was better than the market was expecting.

Raiffeisen Bank International jumped 3.5 percent on Thursday after the bank posted first-quarter profit that easily beat market expectations.

The stocks were the top risers on the pan-European FTSEurofirst 300 index, which was up 0.2 percent at 1,367.24 points at 0737 GMT.

Around Europe, Germany's Dax was up 0.2 percent at 9,712.92 points while France's CAC-40 was a slight underperformer, trading flat after a flash PMI report showed French business activity unexpectedly shrank in May. German PMI readings were mixed: services expanded faster than expected but manufacturing growth slowed.

The indexes faced technical resistances near the multi-year highs they reached last week, with investors reluctant to push the market to new highs given the uncertain macroeconomic outlook.

"I expect the Dax to encounter resistance at 9,780 (a level roughly corresponding to its intra-day high on May 13) and then trade in a range," Farhan Ahmad, a trader at Tradenext, said.

In the U.S., minutes of the Federal Reserve's last meeting reassured investors that policymakers would stick to their easy monetary policy stance.

Sentiment on risk assets was boosted by a private survey showing China's factory sector turned in its best performance in five months in May. That confounded some of the more bearish expectations for the world's second-biggest economy.

Mergers and acquisitions activity once again coloured European trading, with British American Tobacco up 1.9 percent on news Reynolds, in which BAT has a 42 percent stake, may buy Lorillard Inc.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up

(Editing by Larry King)