Europe close: Stocks rise on buoyant global sentiment

(Sharecast News) - European stock markets closed with gains on Tuesday, having been spurred by a strong rally earlier in Asia. The pan-European Stoxx 600 climbed 0.68% to close at 451.70.

France's CAC 40 increased 0.59% to settle at 7,240.88, while Germany's DAX index advanced 0.66% to 15,705.62.

The UK's FTSE 100, meanwhile, saw a modest rise, ending the session up 0.18% at 7,270.76.

On the currency front, the euro faced pressure against its major peers, falling 0.25% on sterling to trade at 85.2p, and losing 0.44% against the dollar to change hands at $1.0848.

"Having spent most of the day treading water yesterday, European markets have tried to make cautious progress higher today, led by the CAC 40 with a strong performance from software maker Ubisoft helping set the tone, even if it isn't in the blue-chip French index," said CMC Markets chief market analyst Michael Hewson.

"These gains have come about because of today's news that Microsoft will propose licensing cloud streaming rights to all current and future Activision PC and console games to it for the next 15 years, as it looks to get its Activision acquisition past UK regulators."

Hewson added that mining stocks were gaining despite a disappointing update from Australian giant BHP, which saw its profits fall 37% on the back of weakness in the Chinese economy.

"The gains in the mining sector appeared to be helped by a sudden late rebound in Chinese markets which saw them close higher for the first time in eight days."

UK government borrowing lower than expected; manufacturing output sees sharp decline

In economic news, the UK government's borrowing for July came in at £4.3bn, notably less than the expected deficit of £5bn, in fresh data released earlier.

Accumulated borrowing for the initial four months of the current financial year amounted to £56.6bn.

Although that figure was £13.7bn higher than the same point last year, it was £11.3bn below the forecast set by the Office for Budget Responsibility in March.

The Office for National Statistics highlighted that by July's end, net debt had reached £2.58trn - equivalent to about 98% of the UK's total economic output, and marking a 1.9% rise from the previous year.

Ubisoft soars on Microsoft offer; BHP and Bakkafrost face declines

In equities, Ubisoft Entertainment surged 8.51% in Paris on the back of Microsoft's latest proposal over its prolonged bid to acquire computer game maker Activision Blizzard, which remained under scrutiny by the UK competition authorities.

In a bid to gain their nod of approval, Microsoft announced on Tuesday that as part of its revised proposal, Activision would divest its non-European streaming rights to Ubisoft.

On the downside, the world's largest miner BHP Group dipped 0.89% in London, after its latest annual report revealed a 37% drop in profits compared to the prior year.

A major contributor to the reduced profitability was escalated costs, as well as the prevailing tight labour market situation in Australia.

Salmon farmer Bakkafrost meanwhile slid 9.67% in Oslo, after its second-quarter earnings met the profit warnings it issued a few weeks ago.

Compounding investor concerns was Bakkafrost's acknowledgment of increased mortality rates within its Scottish farming operations towards the close of the quarter.

Reporting by Josh White for Sharecast.com.