European share indexes were higher in early trade on Wednesday, lifted by the banking and chemical sectors following positive results from Spain's biggest bank Santander and chemical group Bayer.
By 0833 GMT the pan-European FTSEurofirst 300 index of top shares was up 0.7 percent at 909.51 points. The index has gained around 40 percent since reaching a lifetime low in early March, and is up about 9.4 percent for the year.
"Good start this morning … we are right in the middle of a huge earnings season and they are ok," said Jim Wood Smith, head of research at Williams de Broe.
"Banco Santander looks fine to us, Bayer was miles in front of forecasts, but ArcelorMittal results were very poor," he said.
Banks added the most points to the index. Santander was up 1.1 percent after its net profit fell 4.5 percent in the first half, beating analysts' forecasts as the rate of growth in bad loans slowed. UniCredit, Deutsche Bank, BNP Paribas and Societe Generale were 1.6-2.6 percent higher.
Chemical stocks were among the top performers. Bayer gained 3.7 percent after it stuck to its target of limiting the slide in core underlying profit to 5 percent in 2009.
"We are now in an important transition period for these markets and the next few days will be pivotal to see if we can continue the recent strength. Earnings news may help to keep the pullback losses to a minimum," said Jimmy Yates, head of equities at CMC Markets.
Across Europe, the FTSE 100 index was up 0.7 percent, Germany's DAX was 1.3 percent higher and France's CAC 40 gained 1.2 percent.
ARCELORMITTAL DISAPPOINTS
In the basic resource sector, steel maker ArcelorMittal fell 6.1 percent after it said it made a third consecutive net loss, of $792 million, with further inventory write-downs and provisions for job cuts. "It's a meagre outlook. There's recovery, but it's not as fast and as great as expected," said Rbo Securities analyst Frank Claassen.
Miners were in the doldrums as copper slipped 2.3 percent. Anglo American, Antofagasta, BHP Billiton, Rio Tinto and Xstrata were down 1-1.6 percent.
Energy stocks were mixed. British gas producer BG Group was down 1.5 percent after it reported a 31 percent drop in its second-quarter net profit, as gas and oil prices fell sharply, and said it would not meet its production target for the year.
However, BP, Royal Dutch Shell and Total were 0.9-1 percent higher.
Drugmakers reversed from earlier gains as Sanofi-Aventis slipped 0.2 percent following initial rises.
The company beat consensus expectations for its second-quarter earnings when it raised its growth forecast for adjusted earnings per share (EPS) to around 10 percent at constant exchange rates from at least 7 percent.
GlaxoSmithKline, Novo Nordisk and Novartis were down 0.4-1.9 percent.
