* FTSEurofirst 300 up 1.3 percent
* Strong company results, M&A news support equity market
* Risk appetite up, Euro STOXX 50 faces resistance at 2,679
* For up-to-the-minute market news, click on []
By Atul Prakash
LONDON, July 21 (Reuters) - European shares surged in early
trade on Wednesday, boosted by technology stocks, as strong
results from Apple <AAPL.O> improved sentiment and raised hopes
the second-quarter earnings season will be better than expected.
British speciality chemical company Johnson Matthey <JMAT.L>
said first-quarter profit jumped 47 percent, while Dutch
navigation device maker TomTom <TOM2.AS> kept its full-year
outlook in the face of stiff competition. Their shares were up
2.1 and 1.5 percent respectively.
At 0812 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1.3 percent at 1,019.67 points.
Analysts stayed cautious as the index closed almost flat in
the previous session after hitting its lowest in nearly two
weeks and falling for four straight sessions.
"So far so good, but the emphasis will be on Q3 guidance
increasingly," said Bernard McAlinden, investment strategist at
NCB Stockbrokers in Dublin, referring to company results.
"The market is still consolidating last year's gains. We are
waiting just for the market to realise that there won't be a
double dip," he added.
Tech shares were in demand after Apple gave an unusually
upbeat revenue forecast that trounced Wall Street's expectations
and eased fears that the "Antennagate" controversy around its
iPhone 4's reception would hurt sales. []
The European technology index <.SX8P> gained 1.4 percent,
while Nokia <NOK1V.HE>, Ericsson <ERICb.ST>, ARM Holdings
<ARM.L> and Logitech <LOGN.VX> rose 0.9 to 2.9 percent.
The market was also supported by merger and acquisition
news. SSL International <SSL.L> surged 33 percent after consumer
goods group Reckitt Benckiser <RB.L> agreed to buy SSL for 2.5
billion pounds ($3.8 billion) to increase its presence in health
and personal care. Reckitt Benckiser rose 0.5 percent.
"We believe the proposed acquisition represents good
business for Reckitt's, increasing the exposure to consumer
healthcare whilst offsetting some of the ongoing challenges from
the sluggish European consumer," said Darren Shirley, analyst at
Shore Capital.
RISK APPETITE RISES
Appetite for risky assets rose, with the VDAX-NEW volatility
index <.V1XI> falling 3.3 percent. The lower the index, which is
based on sell and buy options on Frankfurt's top-30 stocks
<0#.GDAXI>, the higher the market's desire to take risk.
The Euro STOXX 50 <>, the euro zone's blue chip
index, was up 1.3 percent to 2,661.69 points. The index faced
strong resistance at around 2,679, its 61.8 percent Fibonacci
retracement from a high in June to a low in July.
Banks rose ahead of Friday's results of stress tests on 91
European banks. The tests are expected to show most of the banks
would be able to survive severe economic shocks. The European
banking index <.SX7P> gained 1.2 percent, while Lloyds <LLOY.L>,
BNP Paribas <BNPP.PA> and UBS <UBSN.VX> rose 1.3 to 2.1 percent.
Investors awaited Federal Reserve Chairman Ben Bernanke's
testimony to Congress, due at 1800 GMT, for fresh indications on
the health of world's biggest economy, and policy signals from
the central bank.
Miners were among the top gainers, with BHP Billiton
<BLT.L>, the world's biggest mining house, rising 1.4 percent
after reporting a 16 percent jump in quarterly iron ore output,
taking annual production to a record.
Antofagasta <ANTO.L>, Rio Tinto <RIO.L>, Xstrata <XTA.L> and
Eurasian Natural Resources <ENRC.L> rose 1.4 to 3 percent, also
supported by a rise in key base metals prices.
Among individual movers, BP <BP.L> rose 2.9 percent. It
denied a report its chief executive would leave soon, after the
company lined up $7 billion in asset sales to help pay for the
worst oil spill in U.S. history. []
But Roche <ROG.VX> fell 3.6 percent after a U.S. panel
advised regulators there to revoke top-selling drug Avastin's
approval for breast cancer, a move that would dent its sales.
Investors awaited corporate results from financial firms
Morgan Stanley <MS.N> and Wells Fargo <WFC.N> later in the day.
Across Europe, the FTSE 100 <>, Germany's DAX <> and
France's CAC 40 <> rose 1 to 1.3 percent.
(Editing by Hans Peters)
