Europe stocks rise

European stocks bounced back yesterday, as stellar results from companies such as Nokia, Societe Generale and Unilever distracted investors from recent worries of a credit market crunch.

European Central Bank president Jean-Claude Trichet's comments that "strong vigilance" was needed to stem inflation risks, signalling a possible rate hike in September, did not dent the rally.

The pan-European FTSEurofirst 300 index closed 0.64 per cent higher at 1,536.03 points, bouncing back from a 1.5 per cent drop in the previous session.

Tech stocks were among the biggest gainers, with Nokia jumping eight per cent to reach a five-year high after the world's largest cellphone maker posted better results than expected. "It's clearly an earnings-driven market," said Bert Jansen, an equity strategist at Exane BNP Paribas in Paris. "The best sectors are tech stocks, up on Nokia's earnings, and the telecoms, rising on better-than-expected results from France Telecom."

France Telecom added three per cent after the fixed-line and wireless telecoms group posted half-year underlying earnings boosted by robust mobile sales in emerging markets. Banking stocks also gained ground, paring sharp losses in the past two weeks, on forecast-beating results and comments by executives that banks see little impact from the turmoil in the credit markets.

Societe Generale gained 4.3 per cent after beating profit estimates as it benefited from the sale of shares in the Euronext bourse operator, while Credit Suisse gained 0.7 per cent after unveiling a surprise 48 per cent jump in second-quarter net profit.