* FTSEurofirst 300 up 0.4 pct, DAX up 1 pct
* BHP Billiton holds off on buyback; shares drop
* Earnings season close to end, 52 pct of firms meet/beat
By Blaise Robinson
PARIS, Aug 19 European shares rose in early
trading on Tuesday, extending the previous session's rally, as
investor concern over the conflict in Ukraine began to ease.
Germany's DAX - recently hit by the faceoff between
Ukraine and Russia and concern that sanctions against Moscow
could hurt Europe's biggest economy - outperformed on Tuesday,
up 1 percent. The index has gained nearly 4 percent in the past
10 days but is still down 7 percent since mid-June.
At 0818 GMT, the FTSEurofirst 300 index of top
European shares was up 0.4 percent at 1,344.86 points. That
followed a rise of 1.2 percent in the previous session and
tracked solid gains on Wall Street, where the Nasdaq Composite
closed at a 14-year high.
The FTSEurofirst 300 is still down 3.9 percent since
In Ukraine, government forces reported new advances
overnight, after a weekend breakthrough when troops raised the
national flag in Luhansk, a city held by pro-Russian separatists
since fighting began in April.
"The situation in Ukraine is still very tense, but slowly
investors are getting used to it and turning their focus back on
the macro and micro data," said Arnaud Scarpaci, fund manager at
"There's been a strong outperformance of U.S. stocks versus
Europe in the past few weeks, so there's scope for a little
rebound in Europe in the short term. Good earnings from Lindt
and Moller-Maersk today are helping in that direction."
The German equity market's recent underperformance has
dragged the average price-to-earnings ratio of local shares down
to a level not seen since October 2013, according to data from
Thomson Reuters Datastream.
The MSCI Germany index trades at 12 times
expected earnings while the MSCI Europe trades
at 13.6 times earnings, making Germany's P/E ratio relative to
Europe the cheapest in nearly 10 years. By comparison, Wall
Street's S&P 500 trades at about 15 times expected
Shares in Moller-Maersk surged 5 percent after
the Danish shipping and oil group posted better-than-expected
results, raised its full-year profit outlook and disclosed ed a
$1 billion share buyback plan.
"It's a strong signal that they are upgrading their
expectations for the future by so much," Sydbank analyst Jacob
"I had expected around $4.3 billion on underlying result
this year. Now they are saying $4.5 billion and that shows they
are very confident about the development in Maersk Line in the
Shares in Lindt & Spruengli gained 0.6 percent as
the Swiss chocolate maker confirmed its full-year targets after
profit rose 14 percent in the first half.
Bucking the trend, BHP Billiton stock dropped 3.8
percent. The mining company missed earning forecasts and held
off announcing a buyback but said it would spin off some assets.
As Europe's earnings season draws to an end, about 52
percent of STOXX 600 companies have met or beaten
earnings forecasts, according to Thomson Reuters StarMine data.
Profits have risen 10 percent in the second quarter overall,
but revenue have dipped 0.7 percent, data shows.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Teis Jensen in Copenhagen; Editing by