By Helen Reid
LONDON (Reuters) - In the face of a fresh protectionist move from the United States causing Asian shares to fall overnight, European stocks managed a modest gain on Wednesday thanks to strong results from Adidas and robust mining stocks.
The pan-European STOXX 600 (STOXX) gained 0.2 percent, pushed higher by consumer staples and basic materials. Spain's IBEX (IBEX) lagged peers, down 0.5 percent after disappointing results from Zara fashion chain owner Inditex .
German sports fashion company Adidas (DE:ADSGn) shone at the top of the STOXX, jumping 8.6 percent after announcing a share buyback of up to 3 billion euros and lifting its 2020 profitability target.
Berenberg analysts said strong sales growth surprised the market after "a lot of chatter" about the stock recently.
"Despite the wide-ranging concerns, adidas has delivered a good set of results," said Berenberg's Zuzanna Pusz, adding that the share buyback program showed adidas' focus on shareholder returns.
Technology stocks were the biggest drag on the index after U.S. President Donald Trump threatened to impose tariffs on up to $60 billion of Chinese imports, targeting tech and telecommunications in particular.
"We have got some protection in portfolios, which is a nod to the fact we think sentiment is totally overrun and valuations are very high," said Rory McPherson, head of investment strategy at Psigma Investment Management.
"Clearly the potential trade war would cause us to ramp up that protection, but at the moment we think it's a tail event."
Basic resource stocks (SXPP) climbed 1.1 percent after data showed Chinese industrial production expanded at a much faster pace than expected.
On the flipside of the retail sector to adidas, Zara owner Inditex (MC:ITX) was the top Spanish faller, down 2.6 percent after its results. UBS analysts said the dividend was lower than expected.
German chemicals firm Symrise (DE:SY1G) tumbled 6 percent after 2017 results disappointed the market with slow margin growth.
Peer Brenntag (DE:BNRGn) also dropped after results.
UK insurer Prudential (L:PRU) was a notable gainer, up 5 percent as investors cheered its plan to spin off its British and European business.
Top faller was Belgian postal service Bpost (BR:BPOST) which dropped 18.7 percent after delivering a weak profit guidance for 2018.
German online advertising firm Axel Springer (DE:SPRGn) tumbled 4.5 percent after Berenberg analysts cut their rating on the stock to "sell", saying the company was not delivering as much as digital peers.
Psigma's McPherson has a neutral position on European equities and slightly underweight on the UK, while his biggest underweight is U.S. stocks. "None of them are screamingly cheap," he said, adding U.S. stock valuations are much higher.
Analysts expect earnings to grow around 20 percent this year in the United States, while expectations for European earnings growth are around half that, Thomson Reuters I/B/E/S data shows.
"To deliver on those earnings is much more achievable," said McPherson.
(Graphic - Mar 14 Earnings growth expectations in U.S. versus Europe: http://reut.rs/2FCD5sb)