August 16, 2017 / 7:30 AM / 2 years ago

Strong basic resources boost European shares ahead of euro zone GDP

LONDON, Aug 16 (Reuters) - Miners and oil stocks helped Europe’s major share index make strong gains on Wednesday, as higher metals prices lent a hand and investors awaited euro zone GDP figures expected to confirm the bloc’s economic growth was on track.

The pan-European STOXX 600 rose 0.5 percent, its third day of gains after a sharp sell-off last week. Euro zone stocks and blue chips jumped 0.6 percent.

Basic resources stocks were the top boost, up 1.1 percent after London zinc hit a decade high, lifted by Chinese construction spending.

Leading gainers was British builder Balfour Beatty, up 4.6 percent after strong first-half profits boosted by a rebound in British construction.

Swedish healthcare firm Elekta jumped 2.8 percent after JP Morgan raised it to ‘overweight’.

British car insurer Admiral was the worst-performing, down 6.5 percent after it reported profits up just 1 percent in the first half, dragged down by injury claims costs due to a government change to personal injury rates.

And Swedish food retailer ICA fell 5.2 percent after its second-quarter profits missed forecasts.

Airlines Lufthansa and Easyjet lifted 1.7 to 1.9 percent again, continuing Tuesday’s strong rally as they emerged as likely buyers of Air Berlin’s assets when the German airline filed for insolvency.

Euro zone GDP figures were expected at 0900 GMT, with analysts forecasting 0.6 percent quarter-on-quarter GDP growth, or 2.4 percent annualised.

Stronger economic growth is part of the reason global active funds remain overwhelmingly positive on European equities, the biggest consensus overweight position according to Barclays’ analysis of investor flows.

Second-quarter results season was drawing to a close, with earnings expected to grow 15 percent from the second quarter last year, or 12.8 percent excluding the energy sector, Thomson Reuters data showed.

Revenue growth was tracking 4 percent, or 2.7 percent excluding energy.

Reporting by Helen Reid; Editing by Angus MacSwan

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