* FTSEurofirst 300 index ends 1.3 percent higher
* Ukraine rebels hand over black boxes from Malaysian plane
* ARM Holdings surges after strong results
* Actelion gains as results revive M&A speculation
By Atul Prakash
LONDON, July 22 European shares bounced back on
Tuesday on some strong earnings reports and after signs of
cooperation between Russia and other nations in investigating
the shooting down of a Malaysian airliner over Ukraine.
The handover of flight MH17's black boxes and reports by
international investigators of improved access to its wreckage
came as EU foreign ministers threatened Russia with harsher
sanctions for its support of separatists in the area. However,
France's president signalled the disputed delivery of a warship
to Moscow would go ahead.
"We don't see an immediate escalation in tension and further
sanctions against Russia from the European Union," said Gerhard
Schwarz, head of equity strategy at Baader Bank in Munich.
"But given the tragic loss of life, there will be some
further sanctions down the road and this certainly is not
helpful for the global recovery."
The prospect of harsher sanctions on Russia, combined with
Israel's escalating ground offensive in Gaza, have weighed on
equities and other risk assets in the past week and traders
expect the market to remain jittery.
The FTSEurofirst 300 index of top European shares
ended 1.3 percent stronger at 1,373.75 points after falling 0.5
percent in the previous session.
The market was supported by some positive earnings reports.
ARM Holdings, which sells blueprints for chip
designs, topped the gainers' list on the FTSEurofirst 300. Its
shares surged 5.7 percent after the Cambridge-based firm posted
a 9 percent rise in second-quarter profit.
"A solid start to the earnings season and improving risk
appetite are helping to drive the equity market higher," HSBC
equity strategist Robert Parkes said.
"We are positive on the outlook for corporate earnings in
Europe and believe that earnings are going to surprise on the
Among other sharp movers, Actelion, Europe's
largest biotech company, rose 2.6 percent after it hiked its
2014 profit forecast for the second time this year.
While the firm's chief executive said his strategy to stay
independent was supported by shareholders, traders speculated on
possible bids from larger firms such as AstraZeneca,
Roche, GlaxoSmithKline or Novartis.
"Actelion is the answer to AstraZeneca's chronic pipeline
shortage, GlaxoSmithKline's need for expansion and would be an
easy morsel for Roche or Novartis to digest," Hobart Capital
Markets trader Justin Haque said.
Elsewhere corporate updates were less upbeat, with French
media group Publicis Group warning it would be "very
difficult" to meet its annual target of 4 percent organic sales
growth. Its shares fell 4.7 percent, the worst performer on the
FTSEurofirst 300 index.
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 Francesco Canepa; Editing by Ruth