European shares rise as Unilever lifts consumer stocks

By Purvi Agarwal, Tharuniyaa Lakshmi and ‌Avinash P

July 28 (Reuters) - European ​shares rose ​for a third straight session on Tuesday, as strong results from Unilever helped lift consumer-focused stocks higher and offset weakness elsewhere as earnings season picked up pace.

The pan-European STOXX ‌600 index gained 0.4% to 646.89 at close. Investor sentiment towards consumer-facing stocks, ⁠both staples and discretionary, improved following robust results.

The STOXX 600 food and beverages index and personal and household goods index gained ‌2.8% and 2.3% respectively, and were ‌among the top sectoral gainers on the index.

Unilever jumped 8%, logging its biggest one-day gain in four years, after the consumer goods group beat second-quarter sales growth estimates. The gain also helped ​London's FTSE 100 <.FTSE > advance 0.8%.

Mercedes-Benz added 2.9% after the German automaker reported a 22% rise in quarterly operating profit.

Luxury stocks got a boost after LVMH reported a 3% rise in quarterly sales. Though ⁠its shares were flat, the broader European luxury index edged up 1.5%.

"The underlying fundamentals of economies are still pretty strong, broader earnings ​growth has actually been better than expected both in the U.S. and in Europe," said Nicholas Brooks, head of economic and investment research at London-based ICG.

Technology stocks ​remained in focus after the Information reported China had ‌started manufacturing domestically developed immersion deep-ultraviolet lithography machines, injecting fresh concerns about competition into the AI trade.

This comes in a week packed with U.S. Big Tech earnings ⁠that are crucial to gauge whether the AI story still has room to run.

Among other movers, Barclays lost 4.8% despite reporting a 17% rise in first-half profit that beat forecasts, as analysts said its equities performance undershot market ⁠expectations boosted by Wall Street rivals' bumper quarter.

Italy's Saipem slid 8.9% after the oil and gas contractor lowered its expectations ​for 2026 core earnings to reflect costs linked to the Middle East crisis.

Bechtle jumped 14.8% to the top of the STOXX 600 after the German IT firm raised its full-year outlook.

Energy stocks were the biggest percentage decliners, down 2.4%, ‌as oil prices extended their slide on optimism around another U.S.-Iran deal after Washington paused its strikes over the weekend. [O/R]

The policy statement from Federal Reserve Chair ‌Kevin Warsh will be in focus on Wednesday. The U.S. central bank is expected to hold rates steady ⁠at this meeting, but markets are pricing ‌in one 25-basis-point hike by the ​end of this year, according to LSEG-compiled data.

(Reporting by Purvi Agarwal and Tharuniyaa Lakshmi ands Avinash P in Bengaluru; Editing by Amanda Cooper, Sherry Jacob-Phillips, Mrigank Dhaniwala and ‌Alex Richardson)

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