UPDATE 2-European markets lifted by telecoms and media big guns

  • Reuters
  • Stock Market News
UPDATE 2-European markets lifted by telecoms and media big guns
Credit: © Reuters.

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* Media and telecoms companies lead STOXX 600 gains

* Kering shares slump as Gucci sales slow

* Spanish shares lag after Sabadell results

(Updates to close)

By Sruthi Shankar and Medha Singh

July 26 (Reuters) - Large-cap companies pulled European stocks higher on Friday as a surge in Britain's Vodafone VOD.L and strong earnings for media businesses and Nestle NESN.S spurred recovery from a sell-off driven by the European Central Bank.

The pan-European benchmark index .STOXX rose 0.3%, bouncing back from its worst session in three weeks. London's FTSE 100 .FTSE outperformed European peers with a 0.8% advance, helped by telecoms companies.

Vodafone gained 10.6% to record it strongest performance since late 2002 on plans to separate its towers unit in Europe into a new company worth upwards of 18 billion euros ($20 billion) with a view to a potential stock market listing. STOXX 600 telecoms index .SXKP rose 2.3% as shares of Cellnex CLNX.MC , currently Europe's biggest towers group, gained 3.3% and Telecom Italia TLIT.MI rose 4.1% after Vodafone agreed to jointly roll out 5G in Italy and merge their mobile mast operations. media stocks .SXMP led the gains after upbeat results from France's Vivendi VIV.PA , satellite operator SES SESFd.PA and education company Pearson PSON.L . blue-chip stock to perform well was Kitkat maker Nestle NESN.S , which rose nearly 2% after posting its fastest quarterly sales growth in three years. has been a more positive set of corporate earnings since yesterday's close and chiefly Vodafone," said City Index analyst Ken Odeluga.

European shares took a beating on Thursday after ECB chief Mario Draghi all but pledged to ease monetary policy further and even hinted at a reinterpretation of the bank's inflation target but disappointed some investors who had hoped for an immediate cut to interest rates. Thursday's blip, the main STOXX index posted a 0.8% gain on the week, driven partly by hopes of policy easing from the ECB as economic data points to a worsening outlook for Europe's already slowing economy.

"There is a bit of reassessment and the market has attracted some buyers back due to the big selling yesterday," said Odeluga.

"We also had the U.S. GDP (data), which was not as bad as expected and allows investors to go into the weekend with a bit more positive sentiment."

U.S. data showed economic growth slowed less than expected in the second quarter, though it did little to deter expectations that the U.S. Federal Reserve will cut interest rates by 25 basis points next week. the weak spots, Banco Sabadell SABE.MC and Caixabank CABK.MC fell more than 6.5% after the Spanish lenders reduced their 2019 earnings guidance, hurt by low interest rates. were also in the spotlight after Spain's parliament rejected Pedro Sanchez's bid to be confirmed as prime minister on Thursday. Sanchez said he will work to avoid a repeat election but is no longer prepared to offer a coalition government to far-left Podemos. stock Kering PRTP.PA slumped 7% as its main Gucci brand posted a slower than expected rise in second-quarter sales, hit by a blip in the United States.

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