A slew of upbeat updates from European firms helped the region's benchmark index rise on Wednesday and recoup some of the previous session's sharp losses, though weakness among construction firms and cyclical sectors weighed.
The pan-European STOXX 600 index rose up 0.2 per cent, while the blue chips were flat in percentage terms.
Dutch semiconductor equipment maker ASML, up 3.7 per cent, boosted the tech sector. The firm beat quarterly earnings estimates thanks to strong demand from manufacturers of memory chips.
Europe's tech sector has gained more than 14 per cent so far this year, but worries over stretched valuations, especially among US peers, have put the brakes on this rally.
Strong first-half profit growth boosted shares in Georg Fischer 6 per cent to the top of the STOXX, while French video games maker Ubisoft jumped more than 5 per cent on the back of a strong sales update.
Overall earnings in the second quarter are expected to grow by 7.9 per cent from the same period last year, which would be an increase of 5.6 per cent excluding the energy sector, according to Thomson Reuters I/B/E/S estimates.
“We would like to see those stronger earnings coming through and Europe really turning a corner,” said Dafydd Davies, partner at Charles Hanover Investments.
Energy stocks fell 0.1 per cent, putting pressure on Britain's FTSE 100, while banks were 0.2 per cent lower, extending yesterday's slide as Goldman Sachs put pressure on US lenders.
Heavy losses for builder NCC and lock maker Assa Abloy weighed on the construction sector, which fell 0.6 per cent.
NCC slumped more than 9 per cent after its second quarter pretax profit came in below expectations, while Assa Abloy dropped 8.5 percent after saying that demand in China had turned sour again in the second quarter.
Cross-border deal-making rolled on with Reckitt Benckiser up 1.3 per cent after saying it would sell its food business to US spice and herbs co McCormick & Co Inc for $4.2 bln. Reckitt shares were the biggest boosts on the FTSE 100.
Shares in Spanish firms Aena and Abertis were suspended following a report that the Spanish airport operator had studied a possible takeover offer for the highway concessions company.
German generic drugmaker Stada rose a modest 0.4 per cent after a sweetened takeover offer from buyout groups Bain Capital and Cinven.