Telenor, Weir Group and miners lead European shares to 3-week high

* STOXX 600 up 0.2 pct, blue chips negative

* Weir surges after upping 2017 forecasts

* Telenor also jumps after Q2 beat

* Miners rally as China GDP strong
(Adds detail and quotes, updates prices)

By Kit Rees

LONDON, July 17 (Reuters) – European shares nudged higher on
Monday, though trading was characterised by thin volumes as a
busy few weeks of earnings reports from top regional and U.S.
firms gets underway.

The pan-European STOXX 600 index rose 0.2 percent
to touch a three-week high, while the blue chips
struggled and turned negative to trade 0.2 percent lower.

Last week, European indices enjoyed their strongest week in
more than two months as investors quickly bought the dip spurred
by central banks turning slightly hawkish.

Second-quarter results season kicked off in the U.S. last
Friday with numbers from Citigroup and JPMorgan.

Analysts are expecting earnings to grow 9 percent
year-on-year for European firms, compared with 8 percent for the
U.S., according to Thomson Reuters I/B/E/S.

British engineer Weir Group was the biggest STOXX
riser, surging nearly 10 percent after increasing its forecasts
for its oil and gas units, thanks to strong North American
drilling activity.

“The extent of the Oil & Gas upgrades are significant,
obviously, and shows how volatile this end market can be. This
time, it’s going in the group’s favour, and they are very much
benefiting from it,” analysts at Jefferies said in a note.

Updates from some Nordic firms spurred some sizeable moves
too, with shares in Norway’s Telenor jumping more than
8 percent. The telecoms firm raised its outlook for 2017
earnings margins after its operating results beat expectations.

On the downside, shares in Swedish medical technology firm
Getinge dropped 7.2 percent after its second quarter
core profits lagged forecasts.

While the majority of sectors were in positive territory,
basic resources were the biggest gainers, up 1.3 percent
with miners Anglo American, Glencore and
Antofagasta leading the charge higher after the price
of copper hit a three-and-a-half month high following strong
Chinese GDP figures, the world’s biggest consumer of metals.

Volatile trading continued for trouble UK midcap
construction services firm Carillion which appointed EY
to help with its strategic review. The stock, which has lost
two-third of its value over the past week, rose 14.5 percent.

Analysts pointed to the news that Carillion had been named
as one of the firms to work on building a new high-speed rail
network in Britain, along with Balfour Beatty whose
shares gained 3.4 percent.

“It is very reassuring to see that the government is still
comfortable awarding (Carillion) contracts, so that’s definitely
a good thing,” Rachel Winter, senior investment manager at
Killik & Co, said.

“There are still some major concerns around the company, and
for me the main one is the pension deficit. At the moment the
size of the pension deficit is about three times the market cap
of the company,” Killik’s Winter added.

(Reporting by Kit Rees; Editing by Vikram Subhedar and Raissa
Kasolowsky)

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