European shares rises; U.S. earnings eyed

European shares rose in afternoon trade on Tuesday, tracking a stronger Wall Street, with gains in defensive drugmakers offsetting some weakness in autos as investors await the next batch of U.S. corporate results.

By 1517 GMT the pan-European FTSEurofirst 300 was up 0.8 percent at 1,068.55 points, recouping some losses from earlier in the session when the index fell to a one-week low of 1.050.34.

Pharmaceutical firms, which benefit from their defensive appeal, rose, with AstraZeneca, GlaxoSmithKline, Sanofi-Aventis and Novartis up 1.1 to 2.1 percent.

Earlier, Citigroup reported a fourth-quarter loss which met analysts' expectations, as the third-largest U.S. bank took charges linked to repaying government bailout funds.

IBM is set to announce results after the U.S. market close, while Bank of America and Morgan Stanley's numbers are due on Wednesday. Goldman Sachs and Google are due to report quarterly earnings on Thursday.

"This is going to be an interesting week as we will get a few more bank results as well as some tech results and markets will take their cue from that," said Mike Lenhoff, chief strategist at Brewin Dolphin.

Cadbury rose 3.7 percent to a record high after its board bowed to an improved 11.9 billion pounds ($19.55 billion) offer from Kraft Foods.

On the downside, auto firms were weak, with Daimler, Renault , Porsche and Peugeot shedding 0.1 to 2 percent.

On the economic front German analyst and investor sentiment fell more than expected in January to its lowest level since July, according to a closely-watched survey by the ZEW economic think tank.

Across Europe, Britain's FTSE 100 index, Germany's DAX and France's CAC 40 rose between 0.6 and 1 percent.