* 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.
The pan-European FTSEurofirst 300 index was up 0.3
percent at 1,374.30 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 3.4 percent, making it the best performer
in percentage terms on the FTSEurofirst index.
It 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
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).
"The size of the fine we knew, the reaction is more to do
with BNP's extremely reassuring comments and the efforts made to
protect the dividend. The bank is keeping its 2015 targets so
this must mean they enjoyed a very good first half of the year,"
said Francois Chaulet, fund manager at Montsegur Finance.
BES DRAGS DOWN LISBON BOURSE
However, 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
Portugal's CMVM market regulator announced late on Monday it
would ban naked short-selling of shares - where an investor is
under no obligation to cover its exposure - in BES and Espirito
Santo Financial Group (ESFG). BES's tumble on Tuesday pushed
down Lisbon's PSI-20 equity index by 1 percent.
"BES is very badly pressured by uncertainty about the group,
and even the short-selling ban had only a temporary effect,"
said Luis Goncalves, trader at Gobulling brokers in Porto.
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
Even though data on Tuesday showed that manufacturing growth
had eased within the euro zone currency bloc, analysts said new
economic stimulus measures from the European Central Bank would
support the region's stock markets.
"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
(Reporting by Sudip Kar-Gupta Editing by Jeremy Gaunt)