* FTSEurofirst 300 up 0.3 pct
* BNP Paribas rises on relief at U.S. sanctions settlement
* BNP Paribas shares had fallen sharply in recent months
* Fall in Banco Espirito Santo hits Lisbon market
By Sudip Kar-Gupta
LONDON, July 1 European shares edged higher on
Tuesday, with BNP Paribas among the top performers
after it settled a U.S. sanctions case, a relief to investors.
The pan-European FTSEurofirst 300 index was up by
0.3 percent at 1,374.85 points in early trading - some 2 percent
below a 6-1/2 year peak of 1,399.62 points reached last month.
BNP Paribas rose 2.7 percent, making it the best performer
in percentage terms on the FTSEurofirst index.
BNP Paribas pleaded guilty to two criminal charges and
agreed to pay almost $9 billion to resolve allegations that in
many financial dealings it violated U.S. sanctions against
Sudan, Cuba and Iran.
Analysts and investors said the stock could now recover
ground lost over the last few months: Shares in BNP have lost
some 20 percent since Feb.13 when it announced the provision for
the fine, representing a wipeout in market value of about 15.4
billion euros ($21 billion).
"We're just seeing a bit of a relief rally on BNP Paribas,"
said Terry Torrison, managing director at Monaco-based McLaren
The STOXX Europe 600 Banking Index rose 0.9
BES DRAGS DOWN LISBON BOURSE
Portugal's Banco Espirito Santo fell for the second
day in a row on Tuesday, after dropping to an 11-month low on
Monday when it failed to allay concerns about the company's
dealings with its founding family and its troubled Angolan
Portugal's CMVM market regulator announced late on Monday it
would ban naked short-selling of shares in BES and Espirito
Santo Financial Group (ESFG). BES's tumble on Tuesday pushed
down Lisbon's PSI-20 equity index by 0.9 percent.
Commenting on the broader market trend, McLaren Securities'
Torrison said he expected European stock markets to trade
sideways in the traditionally quiet summer months of July and
August before then rising more sharply towards the end of 2014.
Other analysts also said the market's longer-term outlook
remained positive, due to the prospect of economic stimulus
measures from the European Central Bank.
"I think people will still buy the market on the dip," said
Darren Courtney-Cook, head of trading at Central Markets
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 Blaise Robinson and Alexandre
Boksenbaum-Granier; Editing by Sophie Walker)