By Kit Rees
LONDON (Reuters) - European shares firmed on Wednesday, supported by well-received company results as the focus turned from international politics to the first-quarter earnings season.
The pan-European STOXX 600 (STOXX) index was up 0.2 percent by 0852 GMT, while Germany's DAX (GDAXI) ticked 0.1 percent higher. A rise among more cyclical sectors, such as materials and financials, contributed the most to gains.
Company updates were broadly rewarded with a bounce in shares, as French food group Danone (PA:DANO) rose 3.4 percent after its first-quarter sales beat forecasts on the back of strong demand for baby food in China.
Private healthcare provider Mediclinic (L:MDCM) rose around 5 percent after a full-year update, while Dutch oil and chemical storage company Vopak (AS:VOPA) gained 4 percent after saying it has the potential to improve earnings significantly in 2019.
Russian precious metals miner Polymetal (L:POLYP), whose shares have been hit by concerns over U.S. sanctions, was the biggest gainer after saying that its first-quarter revenue rose 19 percent year-on-year.
While the European first-quarter earnings season is not expected to be quite as stellar as the U.S., year-on-year earnings growth for MSCI EMU (European Economic and Monetary Union) is expected to be around 16 percent in dollar terms, according to Thomson Reuters I/B/E/S data.
"(The earnings season) is going pretty well in Europe, just not quite at the same pace as the U.S. ... the U.S. are just a couple of steps ahead in terms of their movement through the economic cycle," Jasper Lawler, head of research at London Capital Group, said.
"We're looking actually at the next set of few quarters of growth, earnings acceleration probably, whereas in the U.S. ... the growth is probably going in the other direction," Lawler added.
Aside from earnings, deal-making was not far from the action after British property company Hammerson (L:HMSO) withdrew its recommendation that shareholders back a merger with smaller rival Intu Properties (L:INTUP).
"Retail businesses are already struggling with higher business rates as well as declining footfall so today’s news that Hammerson is pulling out of its ... bid for its rival Intu Properties is quite a sensible move," Michael Hewson, chief market analyst at CMC Markets UK, said in a note.
Shares in Hammerson rose 3 percent, while Intu Properties fell more than 4 percent, placing it among the worst-performing stocks on the STOXX 600.
Last week France's Klepierre (PA:LOIM) walked away from a bid for Hammerson, saying that the British firm failed to provide "meaningful engagement" over a potential deal.