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London - European shares bounced back on Tuesday, lifted by strong company results and news of acquisitions after falling in the previous five sessions on concerns over China's growth.
The FTSEurofirst 300 index of top European shares was 0.4% higher at 1 536.23 points by 10:04 after hitting a two-week low in the previous session. The broader STOXX Europe 600 index also rose 0.4%.
Shares in Kering surged 6.6% after Gucci, the flagship brand of the French luxury and sportswear group, posted a 4.6% rise in underlying second-quarter sales.
RSA Insurance Group surged 11.3% after Zurich Insurance said it was weighing up a bid for the British group with a market capitalisation of £4.4bn. Zurich fell 3%.
Melrose jumped 10.7% after saying it would sell its Elster business to Honeywell for £3.3bn, while engineering firm GKN gained 7.8% after agreeing to acquire Netherlands-based Fokker Technologies for €706m to strengthen its position as a supplier to aeroplane makers.
"The market has been preoccupied with uncertainties related to China in the last couple of days, but those concerns are taking a backseat today and equities are getting some support from company earnings and M&A," Gerhard Schwarz, head of equity strategy at Baader Bank in Munich, said.
In the past five days, concerns about China's growth dominated the market. Shanghai shares fell again on Tuesday even after Beijing pledged to lend support. Stocks sank 8% on Monday.
"We are in an environment where you have a lot of volatility in the market and there is a Federal Reserve meeting, which may provide further hints about a US rate hike cycle. The market is still in a wait-and-see attitude," Schwarz said.
Investors awaited the two-day US Federal Reserve meeting beginning later in the day, with some expecting that the central bank will make its case for hiking rates as early as September.
Germany's Gerresheimer jumped nearly 15% to a record high after the company said it will buy US pharmaceutical packaging company Centor, expanding its footprint in the largest primary pharma packaging market.
Norwegian oil major Statoil rose 2.3% after posting second-quarter adjusted operating profit that was better than forecast and maintained its quarterly dividend.
On the downside, British power producer Drax, which has converted some of its power plant capacity to run on cleaner biomass, fell 12% after saying it has started a strategic review of its business after the government indicated changes to renewable energy subsidies.
