By Helen Reid
LONDON (Reuters) - British shares bounced back on Thursday, driven by financial and consumer stocks, as investor worries eased and another bid for pay-TV firm Sky boosted its stock.
The FTSE 100 <.FTSE> ended the session up 0.8 percent at 7,651.33 points, almost recovering all of Wednesday's losses after the release of further U.S. tariff plans, as attention shifted to an earnings season expected to deliver solid growth.
Index gains were driven by financials, consumer stocks and Sky, which rose after the latest bid in a battle between Comcast and Twenty-First Century Fox to acquire it.
Sky <SKYB.L> gained 3.4 percent after Comcast made a 14.75 pound per share counter-bid, exceeding a Twenty-First Century Fox offer. The gains pushed the pay-TV stock to its highest since the dotcom bubble.
"While a counter-bid is possible, we do not view Sky at 15 pounds as an attractive proposition and view the bidding war as lacking sufficient momentum to support Sky above its current price (3 percent above the leading bid)," said Macquarie analysts, downgrading the stock to "neutral".
The FTSE 100 was helped in part by its weighting in "defensive" sectors like consumer staples and healthcare, which have strong cash flows and big payouts and which investors turn to in times of uncertainty.
Tobacco company British American Tobacco <BATS.L> and pharma stocks AstraZeneca <AZN.L> and GSK <GSK.L> were among the top boosts to the index.
Bookmaker Paddy Power Betfair <PPB.I> rose 2.5 percent, with traders citing relief after England was knocked out of the World Cup by Croatia.
Oddschecker estimated bookmakers could lose 100 million pounds if England won the World Cup.
Paddy Power peer GVC <GVC.L> also gained two percent.
Among smaller stocks, ASOS <ASOS.L> shares sank 10.5 percent after the online fashion retailer missed forecasts for sales growth in its latest trading period and said full-year growth would likely be at the lower end of its guidance.
"The key disappointment is EU, where revenue growth slowed to 23 percent in constant currency," said Berenberg analysts. "UK performance remained very strong, which is positive ... given this is ASOS' most mature and strongest market."
Computacenter <CCC.L> shares jumped 9.3 percent to the top of the FTSE mid-caps index after the IT services firm said it expected full-year results to be "comfortably in excess" of its prior forecasts.
Overall analysts have been upgrading their earnings expectations for the FTSE 100 in recent weeks, a good omen for companies' performance though the upward revisions also set a higher hurdle for earnings to beat.
GRAPHIC - FTSE 100 earnings revisions: https://reut.rs/2NJ3Tr2
(Reporting by Helen Reid and Kit Rees, Editing by William Maclean)