August 5, 2014 / 7:40 AM / 3 years ago

BMW, Credit Agricole boost European shares after results

* FTSEurofirst 300 up 0.5 pct, Germany’s DAX up 0.6 pct

* Strong corporate results lift market

* Vivendi rallies after Telefonica’s bid for Brazilian unit

By Francesco Canepa

LONDON, Aug 5 (Reuters) - European shares rose early on Tuesday as strong results from German car maker BMW and other blue-chip stocks supported an otherwise subdued market.

Shares in BMW traded 2.9 percent higher after the luxury car maker reported a higher than expected second-quarter operating profit, helped by new off-road models and strong China sales.

Deutsche Post also reported a better than expected quarterly operating profit as an economic recovery in Europe and North America boosted trade flows, sending its shares up 2.2 percent.

Both stocks were helping Germany’s DAX regain some ground. It has underperformed other euro zone indexes in recent sessions due to its larger exposure to Russia, whose economy is being hit by international sanctions imposed for its role in the Ukrainian crisis.

The DAX was up 0.6 percent at 9,205.25 points by 0723 GMT, with the pan-European FTSEurofirst 300 0.5 percent higher at 1,336.58 points.

“I don’t think the German market is out of the woods yet,” said Markus Huber, a senior trader at Peregrine & Black, who expected the DAX to fall to 9,000 points.

“At the moment we’re taking a breather but we should be going down after that.”

France’s CAC was also up 0.6 percent, helped by surges in the country’s third-biggest listed bank, Credit Agricole and media group Vivendi.

Agricole rose 6.1 percent after its quarterly results, with brokers saying the bank’s profit before tax was higher than expected despite a 708 million euro ($950 million) hit from its stake in troubled Portuguese lender Banco Espirito Santo .

Vivendi added 3.5 percent after Spain’s Telefonica presented a 6.7 billion euro ($8.99 billion) offer for the French firm’s Brazilian unit GVT. Vivendi said none of its subsidiaries were for sale.

The broader market may get a steer from Purchasing Managers Index surveys for the euro zone’s three largest economies - Germany, Italy and France - and the euro bloc as a whole, due to be published between 0745 GMT and 0800 GMT.

The FTSEurofirst 300 has fallen nearly 4 percent over the past two weeks, pummelled by concerns about a tightening of U.S. monetary policy, financial troubles at Banco Espirito Santo and geopolitical tensions ranging from Ukraine to Gaza.

With all these concerns still present in the market, traders said the downtrend may resume shortly.

“Nothing has materially changed since last week and everything that was weighing the bulls down is still firmly wrapped around their necks,” Jonathan Sudaria, a dealer at Capital Spreads, said in a trading note.

“The down move may have stalled and some markets have had a modest up tick but traders are already framing this as a textbook dead cat bounce.”

Europe bourses in 2014:

Asset performance in 2014:

Today’s European research round-up (Reporting by Francesco Canepa; Editing by Catherine Evans)

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