Europe Shares Mostly Rebound as Banks Rise

Most European stock markets climbed back into positive territory on Tuesday after steep losses the prior day, with gains for banks lifting indexes and TeliaSonera AB rallying after a MegaFon dividend deal.

The Stoxx Europe 600 index (XX:SXXP) +0.80% took on 0.7% to 253.42, after dropping to its lowest level since mid-January on Monday.

Posting the biggest gain in the index, TeliaSonera (SE:TLSN) +7.36% jumped 8.2% after the Swedish telecom operator reached a dividend deal with other shareholders in Russian MegaFon. MegaFon will pay a $5.15 billion dividend to its shareholders and seek an initial public offering.

Among other notable advancers in Europe, Michelin (FR:ML) -2.58% added 7% after it reported a 5.1% increase in revenue in first quarter and reaffirmed its 2012 outlook. HSBC lifted the stock to overweight from neutral.

According to Reuters, the French CAC 40 index (FR:PX1) +1.01% traded 0.8% higher at 3,124.31, further buoyed by the index’s banks. Credit Agricole SA (FR:ACA) -4.47% rose 1.9%, Société Générale SA (FR:GLE) -3.90% added 1.7% and BNP Paribas (SAFR:BNP) -4.07% advanced 1.5%.

Banks were also on the rise in Germany and Commerzbank AG (DE:CBK) -4.60% gained 2.3% and Deutsche Bank AG (DE:DBK) -3.44% rose 1.7%. The DAX 30 index (DX:DAX) +0.85% was up 0.9% to 6,584.26.

Deutsche Lufthansa AG (DE:LHA) -3.83% rose 3.9% after Credit Suisse upgraded the airline to outperform from neutral.

In the U.K., International Consolidated Airlines Group SA (UK:IAG) +3.69% took on 3.3% following an upgrade to outperform from neutral from Credit Suisse.

Miners were also inching higher in the U.K., tracking a rise in metals prices. Fresnillo PLC (UK:FRES) +1.54% rose 1.5%, Antofagasta PLC (UK:ANTO) +0.18% gained 1.1% and Vedanta Resources PLC (UK:VED) +1.54% nudged 1.6% higher.

British banks followed the sector trend in Europe and Barclays PLC (UK:BARC) +2.37% BCS -2.49% increased 2.4%, while Lloyds Banking Group PLC (UK:LLOY) +1.86% LYG -0.53% was 1.3% higher.

Bucking the positive trend in London, British American Tobacco PLC (UK:BATS) -0.48% BTI -0.52% lost 0.6% after Bank of America Merrill Lynch cut the stock to neutral from buy.