Retailers, cyclicals strength give European shares a leg-up; Pearson slumps again


LONDON (Reuters) - A run higher for energy shares and miners, as well as strong updates from retailers Burberry and B&M helped drive European shares higher in early deals on Wednesday, though renewed pain for publisher Pearson weighed on the media sector.


The pan-European STOXX 600 index was up 0.4 percent, as were the blue chips.


Luxury goods group Burberry was the second-top gainer, rising around 4.3 percent after reporting 3 percent underlying revenue growth in the first quarter, helped by stronger demand in mainland China and continuing good performance in its British market.


Peers Kering and LVMH also rose around 1 percent.


At the other end of the retail spectrum, discount store operator B&M also rose more 4 percent after issuing a trading update, in which it said that it was on track to achieve profit targets for the full year.

With the European second quarter results season just around the corner, expectations see earnings increasing by over 9 percent from the same period in 2016, which would be a rise of over 6 percent excluding the energy sector, according to Thomson Reuters I/B/E/S estimates.

Strength in oil and metals prices helped lift the heavyweight European energy sector and basic resources, which gained 0.8 percent and 0.5 percent respectively.

The cyclical autos sector was helped by a 1.3 percent rise in Valeo shares, which gained after the car parts maker said that it was eyeing a sale of a unit to Raicam.

Education publisher Pearson continued its slide from the previous day when it announced plan to sell its stake in Penguin Random House, down around 4.6 percent as broker downgrades and cuts to estimates rolled in.

Shares in British oil and gas services company Amec Foster Wheeler were hit after confirming that Britain's Serious Fraud Office (SFO) was investigating the firm and individuals associated with the business.

(Reporting by Kit Rees, Editing by Vikram Subhedar)

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