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UPDATE 1-Financials and Danone help European shares edge higher, commodities weigh

Published 15-08-2017, 02:29 pm
© Reuters.  UPDATE 1-Financials and Danone help European shares edge higher, commodities weigh
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* STOXX 600 up 0.1 pct, blue chips gain 0.3 pct

* Danone boosted by activist stake

* Standard Life Aberdeen rises after upgrade

* Schibsted drops following Facebook marketplace news

* Commodity-related stocks weigh (Adds detail, updates prices)

By Kit Rees

LONDON, Aug 15 (Reuters) - European shares rose modestly on Tuesday, recovering further ground as geopolitical tensions eased in holiday-thinned trading, though falls among commodity-related stocks capped gains.

The pan-European STOXX 600 .STOXX index was up 0.1 percent, weighed by a drop in the basic resources .SXPP and energy .SXEP sectors after oil prices gave up earlier gains. O/R

European blue chips .STOXX50E gained 0.3 percent, however, as did Britain's FTSE 100 .FTSE , while Germany's DAX .GDAXI ticked 0.2 percent higher. Italian and Austrian markets were closed for a holiday.

Health stocks and financials were the biggest contributors to gains, with banks .SX7P trading roughly flat. The sector was hit particularly hard in the latter part of last week as tensions rose between the United States and North Korea.

Danone DANO.PA led the food and beverage index .SX3P higher, up 1.6 percent after a media report that the activist fund Corvex Management owned a stake in the French yoghurt maker. and asset manager Standard Life Aberdeen SLA.L was among the biggest gainers, rising more than 2 percent following a supportive note from broker Barclays (LON:BARC), which raised its rating on the firm to "overweight", citing synergies from its acquisition of Aberdeen Asset Management. synergies at £200m appear attractive and there is evidence to suggest that previous headwinds of outflows at GARS and global emerging markets (GEM) at Aberdeen are receding," analysts at Barclays said in a note, referring to Standard Life's flagship Global Absolute Return Strategies Fund (GARS).

Elsewhere, Norwegian consumer publishing firm Schibsted SBSTA.OL was the biggest faller, dropping 6.4 percent after Facebook FB.O announced new marketplace services, while retailer Next 's NXT.L shares fell 3.7 percent after Berenberg cut its rating on the stock to "sell" from "hold". also spurred some moves, with fund supermarket Hargreaves Lansdown HRGV.L falling 2.1 percent after reporting its full-year results. potash miner K+S SDFGn.DE fell 5 percent after saying that it was unlikely to reach its 2020 earnings EBITDA target, blaming a slow recovery of potash prices. at UBS said that while K+S' second-quarter results were broadly in-line on depressed levels, the guidance was "uninspiring".

The European second-quarter earnings season is rolling to a close with 82 percent of MSCI Europe firms having already reported earnings, according to Thomson Reuters data.

More than 60 percent have either met or beaten analysts' expectations.

"It's been a robust earnings season, however it hasn't been one that we feel justifies the high valuation of some of the European equity indices at this point in time," Jonathan Roy, advisory investment manager at Charles Hanover Investments, said, adding that for this reason trading is starting to be subdued in some of the indexes, such as Germany's DAX.

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