* FTSEurofirst 300 flat, off lows after UK, German data
* Standard Chartered rebounds despite profit fall
* Credit Agricole boosted by profit rise
* Fresnillo hit after div cut, profit fall
By David Brett
LONDON, Aug 6 European shares nudged higher on
Tuesday as signs of a faster-than-expected recovery in the UK
and German economies helped the FTSE 100 and the DAX recoup
By 1053 GMT, the FTSEurofirst 300 was up 0.1
percent at 1,226.24, while the index of euro zone blue chip
shares was up 0.55 points at 2,809.63.
Britain's FTSE 100 rebounded off a session low after
data showed UK manufacturing grew much more strongly than
expected in June, following on the heels of strong services
sector data on Monday and suggesting the UK recovery is
Germany's DAX recovered from a shaky start too, up
0.2 percent at 8,418.84 after data showed industrial orders
surged by 3.8 percent on the month in June, their biggest rise
Ronald Doeswijk, chief strategist at Robecco, however, said
the data would only provide a short-term boost for markets.
"It is comforting to see that producer confidence is
suggesting that we have seen the bottom, but on the other hand
we think that austerity as well as a financial system that is
not willing to lend money to companies will still suppress
growth for a longer time," he said.
Loose monetary policy by major central banks would continue
to support equities, but for a longer-term recovery earnings
need to improve before Robecco turns more positive on Europe,
In the short term the FTSEurofirst 300 and the STOXX50e were
facing hurdles with both indexes in overbought territory,
according to their nine-day relative strength indicators, and
with indexes approaching the year highs they reached in May.
"The dog days of summer have arrived and after a profitable
run from the late June lows, equity investors might just be
anticipating a period of consolidation, assuming a quieter spell
of macro and political news," said Ian Williams, equity
strategist at Peel Hunt.
In a results-heavy session banks were very much in
Asia-focused bank Standard Chartered rallied 3.5
percent following a recent underperformance. While it reported a
16 percent drop in first-half profits, its shares were lifted by
a robust outlook and exposure to growth in Africa and India.
French bank Credit Agricole rose 3.9 percent after
reporting a rise in quarterly profit.
Europe's largest bank HSBC, however, fell 0.8
percent as Deutsche Bank cut its rating on the company to "hold"
from "buy". The shares extended losses after a 4.4 percent fall
on Monday when the bank reported weaker-than-expected results.
Away from the banks, Deutsche Post and Sky
Deutscheland rose 3 percent and 5.6 percent after
their respective updates.
On the downside, German-based Lanxess, the world's
largest maker of synthetic rubber for tyres, slid 6.4 percent
after issuing a profit warning.
Precious metals miner Fresnillo shed 5.4 percent
after cutting its dividend and reporting falling first-half
Reinsurer Munich Re was down 4 percent after its
second-quarter net profit fell sharply on flood claims.
Earnings expectations continue to be downgraded for European
companies, with third-quarter estimates cut by an average of 3
percent for those companies which have already reported earnings
in the current quarter, according to Starmine data.