August 29, 2013 / 10:37 AM / in 4 years

Vodafone helps European shares halt sell-off

* FTSEurofirst 300 up 0.6 pct, FTSE 100 up 0.7 pct

* Vodafone rises 9 pct to 12-year high on Verizon talks

* Telecoms make biggest one-day rally in more than 2 years

* Sentiment improves as potential Syrian strikes delayed

By Blaise Robinson and Atul Prakash

PARIS/LONDON, Aug 29 (Reuters) - European stocks rose on Thursday, snapping a sharp two-day drop, as Vodafone’s renewed talks with Verizon sent the UK firm’s stock to a 12-year high and sparked a brisk rally in the telecom sector.

Corporate results also returned to the forefront of investors’ minds, with Carrefour surging 5.2 percent after the world’s second biggest retailer posted a sharp improvement in earnings at its core French business.

At 0945 GMT, the FTSEurofirst 300 index of top European shares was up 0.6 percent at 1,205.44 points, after losing 2 percent in two days.

UK’s FTSE 100 was up 0.7 percent at 6,474.71 points, with Vodafone shares’ 9 percent jump representing more than three quarters of the London benchmark’s rise.

“Historically, quotes have originated from the Verizon camp, confirming interest, whilst Vodafone has remained silent. Traders have been quick to acknowledge Vodafone’s response to press speculation,” said Marc Kimsey, senior trader at Accendo Markets.

Vodafone said on Thursday it was in talks with Verizon to sell its 45 percent stake in their U.S. joint venture Verizon Wireless, for what a Bloomberg report said would be about $130 billion.

Vodafone stock’s jump represented a rise of 8.3 billion pounds ($12.9 billion) in the market capitalisation of the group, which is the fourth biggest UK company by market value after Royal Dutch Shell , HSBC and BHP Billiton.

The news sparked a rally in the sector, with Telecom Italia up 3.2 percent, Orange up 2.1 percent and Deutsche Telekom up 1 percent. The STOXX Europe 600 telecom sector index was up 3.5 percent, the sector’s biggest one-day rise in more than 2 years.

Investors were also more open to buying as prospects of an imminent Western-led attack on Syria lessened. U.S. plans for a limited military strike against Syria in response to last week’s chemical weapons attack faced obstacles with British allies and U.S. lawmakers, which could delay any action.

“The overall sentiment remains cautious, but the fact that military action against Syria doesn’t look imminent any more is prompting a number of investors to bet on a rebound at this point,” said Guillaume Dumans, co-head of research firm 2Bremans.

Around Europe, the euro zone’s blue-chip Euro STOXX 50 index was up 0.4 percent, Germany’s DAX index up 0.3 percent, and France’s CAC 40 up 0.3 percent.

Among other sharp movers, WPP rose 4.2 percent after the world’s largest advertising agency improved its outlook for the full year and reported a 5 percent rise in like-for-like revenues in July.

Smart card maker Gemalto rose 6 percent after reporting higher first-half sales and saying it expects double-digit profit growth.

With Europe’s earnings season drawing to an end, about 55 percent of STOXX Europe 600 companies have met or beaten analysts forecasts, Thomson Reuters Starmine data shows, the best relative earnings season since the third quarter of 2012.

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