European equity markets were higher for a second successive session on Wednesday driven by strong corporate earnings in the insurance sector.

By mid morning, the FTSE Eurofirst 300 was up 0.7 per cent to 1,534.59, Frankfurt's Xetra Dax added 0.4 per cent to 7,542.33, the CAC 40 in Paris gained 0.8 per cent to 5,664.91 and London's FTSE 100 climbed 0.4 per cent to 6,331.8.

ING (NYSE:ING), the Dutch financial services company, rose 3.8 per cent to EU31.92 after reporting a 27 per cent rise in second-quarter net profit. Strong results throughout the insurance and banking giant's core businesses and the sale of part of its stake in domestic rival ABN Amro helped fuel profit growth.

Paul Goodhind at Bear Stearns reiterated its "outperform" recommendation and said: "Encouraging operating trends and reassurance on credit exposure should support the share price."

Forecast-beating numbers also from Britain's Royal & Sun Alliance boosted the sector. The UK company's shares gained 4.3 per cent to 142p.

Shares in German financial advisor MLP rose 2 per cent to EU12.51 in spite of denials from the company about receiving an approach from French insurer Axa. Axa shares were up 2.9 per cent to EU29.90.

Also benefiting from the wave of improved sentiment in the insurance sector were Aegon, the Dutch group, which climbed 3.1 per cent to EU13.49, Germany's Allianz, which added 1.8 per cent to EU160.85 and Swiss group Zurich Financial, which rose 2.3 per cent to SFr349.75.

STMicroelectronics (NYSE:STM), the Franco-Italian chipmaker, rose 4.6 per cent to EU12.85 after Nokia announced the end of its own chipset development, favouring closer ties with STM in 3G technology.

Bayer (NYSE:BAY), the German drugs and chemicals group, had a lacklustre session on Tuesday when its stronger-than-expected second-quarter resutls were overshadowed by a large banking sector recovery.

Having further time to digest the results, brokers were united on Wednesday in praise of the company. Among them, Goldman Sachs reiterated its "conviction buy", which was "increasingly justified by its strong operational performance and low relative valuation".

Shares in Bayer gained 3.9 per cent to EU53.24.

----------------------------------------------------------------------------------------

By Neil Dennis

copyright © 2007 The Financial Times Limited.