LONDON (Reuters) - A flurry of results for heavyweight mining stocks and a plunge in Provident Financial (PFG.L) shares injected some energy into European shares on Tuesday, with the region’s benchmark indexes ending a three-day losing streak.
The pan-European STOXX 600 rose 0.8 percent, having fallen close to a five-month low in the previous session, while euro zone blue chips .STOXX50E gained 0.9 percent, also supported by a weaker euro.
Italian blue chips .FTMIB fell 0.1 percent, lagging the broader market as fresh political worries put pressure on the country's government bonds.
Europe’s basic resources sector .SXPP enjoyed a second session of gains and was the top-gaining sector, up 1.7 percent, supported by a rally in iron ore prices. [MET/L]
Jasper Lawler, senior market analyst at London Capital Group, said it was positive that the mining firms were able to wind down some of their debt and move into a period of more sustainable profitability.
UK subprime lender Provident Financial (PFG.L) shed 66 percent after it issued its second profit warning in two months, cancelled its dividend and said that its chief executive was leaving.
“Overall, this is without doubt a disaster for a company and management team which, up until recent times, we regarded extremely highly,” analysts at Shore Capital Markets said in a note, suspending their “buy” recommendation.
Shares in Provident Financial were already down around 40 percent for the year ahead of the profit warning, which took year to date losses to nearly 80 percent.
On the positive side, UK housebuilder Persimmon (PSN.L) rose 1.8 percent after it posted a 30 percent rise in first-half profit.
A rally in Fiat Chrysler (FCHA.MI) stalled after Chinese automaker Great Wall Motor affirmed its interest in the Italian-American automaker but said it had not held talks. Fiat shares touched a 19-year high before ending up 0.3 percent.
The European corporate earnings season is drawing to a close, with 87 percent of MSCI Europe firms having given updates for the second quarter.
Of these firms, more than 60 percent have either met or beaten analysts’ expectations, according to Thomson Reuters data, with earnings growth for the quarter clocking in at around 24 percent compared with the same period last year.
Reporting by Kit Rees; Additional reporting by Danilo Masoni in Milan; Editing by Keith Weir and David Holmes