By Helen Reid
LONDON (Reuters) - Miners and oil stocks helped Europe’s major share index make robust gains on Wednesday as higher metals prices lent a hand and improved euro zone GDP figures underpinned investor optimism over the region’s equities.
The pan-European STOXX 600 rose 0.7 percent, its third day of gains after a sharp sell-off last week. Euro zone stocks and blue chips .STOXX50E jumped 0.8 percent.
Basic resource stocks .SXPP were the top boost, jumping 1.8 percent after London zinc hit a decade high, lifted by Chinese construction spending.
Anglo American (AAL.L), Rio Tinto (RIO.L), Glencore (GLEN.L) and BHP Billiton (BLT.L) all rose 2.2 to 2.3 percent, cementing strong benchmark gains. Oil stocks .SXEP also jumped as crude prices edged up.
Euro zone GDP expanded by 0.6 percent quarter-on-quarter, and the annual growth figure was upgraded to 2.2 percent from the 2.1 percent earlier estimated.
Stronger economic growth is part of the reason global active funds remain overwhelmingly positive on European equities, the biggest consensus overweight position according to Barclays’ analysis of investor flows.
“The market mindset is that Europe is recovering from a very deep, very long recession that hit at its financial core,” said Christopher Peel, chief investment officer at Tavistock Wealth.
“The banking system is finally starting to show signs of having worked through the legacy of 2008-2009,” he added.
Fiat and Exor jumped 4.2 and 2.6 percent, extending gains from Monday when a media report said a Chinese company may be interested in the carmaker.
Airlines Lufthansa (LHAG.DE) and Easyjet (EZJ.L) lifted 1.4 to 2.5 percent, continuing Tuesday’s strong rally as they emerged as likely buyers of Air Berlin’s (AB1.DE) assets when the German airline filed for insolvency.
Swedish healthcare firm Elekta (EKTAb.ST) gained 2 percent after JP Morgan upgraded it to ‘overweight’.
“We believe the potential of [radiation therapy] Unity has not been fully captured by the market; this is reflected in the c. 13 percent short interest in the stock,” JP Morgan analysts said.
“Consensus momentum could swing in the next six to 12 months,” they added.
Meanwhile second-quarter profit disappointment weighed on Swedish food retailer ICA (ICAA.ST), down 5 percent.
British builder Balfour Beatty (BALF.L) jumped 5.8 percent, leading construction stocks higher, after first-half profits were boosted by a rebound in construction in Britain.
Car insurer Admiral (ADML.L) dropped 8.4 percent after its profits rose just 1 percent in the first half.
Second-quarter results season was drawing to a close, with earnings expected to grow 15 percent from the second quarter last year, or 12.8 percent excluding the energy sector, Thomson Reuters data showed.
“Earnings and earnings expectations are rising as you’re getting a global recovery,” said Tavistock’s Peel.
Reporting by Helen Reid; Editing by Angus MacSwan and Alister Doyle