European shares rose yesterday as gains for bank Credit Suisse and drug-maker Novartis outweighed losses for mining companies, which fell on worries about slower economic growth.
Stronger than expected quarterly earnings from engineering group ABB and chemical and pharmaceutical maker Bayer also helped underpin European stock markets.
The FTSEurofirst 300 index of top European shares closed 0.2 per cent higher at 1,315.78 points, having fallen as much as 1.3 per cent earlier in the session.
Europe's benchmark index recovered in late trade, tracking a bounce in US financial stocks which saw Wall Street's leading indexes switch into positive territory despite weaker than expected US new home sales data.
Equity market performance across Europe was mixed, with Britain's FTSE 100 down 0.5 per cent and the French CAC 40 0.3 per cent lower while Germany's DAX rose 0.4 per cent and the Swiss SMI jumped 1.9 per cent.
Credit Suisse rose 4.2 per cent despite booking a further 5.3 billion francs (€3.26 billion) in credit-linked write-downs.
"Credit Suisse succeeded to reduce the risk exposures significantly throughout the first quarter of this year which reduces the capital at risk in coming quarters," Sal. Oppenheim said in a research note.
Dresdner Kleinwort said Credit Suisse's tier-1 capital ratio of 9.8 per cent "may relax those concerned about a capital increase."
The DJ Stoxx European banks index rose 0.6 per cent, held back by, among others, Royal Bank of Scotland (RBS), which fell 1.2 per cent having announced earlier in the week a $12 billion rights issue.
Societe Generale started RBS with a "sell" rating and a target price of 255 pence.
Health care was the day's top sectoral performer in Europe with a gain of 1.2 per cent. Novartis advanced 2.9 percent to 51.70 Swiss francs, buoyed by a JPMorgan price target increase to 63 francs.
Bayer rose 3.1 per cent after reporting first-quarter profits above market expectations. "Bayer delivered strong results in a challenging environment," said Equinet, which rates Bayer "buy".
ABB shares climbed 6.5 per cent to their highest level since early January after first-quarter net profit nearly doubled.
"It is clear that pricing in core businesses remains very robust and we expect margins performance to show further momentum," Bear Stearns said in a note on ABB's results.
On the downside, shares in the world's largest dental implant maker Nobel Biocare lost 11.2 per cent after the group posted a 25-per cent drop in first-quarter net profit and gave a more pessimistic outlook.
"That's a confession that digs deep holes in the share price, especially as the market outlook has been cut back and margins are eroding," analysts at bank Wegelin said in a note.