* ARM and Richemont beat expected earnings
* Mixed PMIs leave space for rate cut
* Defensives continue to outperform
By Alistair Smout
LONDON, April 23 (Reuters) - European shares rose on Tuesday, buoyed by strong earnings updates and fresh hopes for further monetary easing in the region following mixed macro economic data.
Chip-makers ARM and STMicroelectronics surged 8.6 percent and 5.7 percent respectively, leading the gainers in the FTSEurofirst 300 index of leading shares.
ARM reported above-expectated profits, while STMicro reported signs of a market recovery and said new products should drive a pick up in sales in the second half of this year.
Purchasing Managers Index (PMI) data also suggested that previously weak euro zone markets were improving, with a downturn in France easing following its worst month in March since 2009.
However, the so-far resilient German economy saw a sharp drop in business activity in April.
"There's a bit of catch up from France, which has been the weakest in macro surveys, so that was a positive surprise today, whereas Germany could only stay above trend for so long," Robert Quinn, chief european equity strategist at Standard & Poor's Capital IQ, said.
However, traders said that the weaker German data had increased the chance of stimulus from the European Central Bank, possibly in the form of a rate cut as early as next week.
"The Bundesbank may become a bit more doveish with regards to interest rates. There is still the chance of a rate cut," one European equity sales trader said.
The pan-European FTSEurofirst 300 rose 1.3 percent to 1,169.64 points at 1056 GMT, while the euro zone's blue-chip Euro STOXX 50 index advanced 1.5 percent to 2,623.06.
Richemont gained 6.4 percent, adding the third-most points to the FTSEurofirst 300, after signalling its annual profit had risen by nearly a third from a year ago.
The results from Richemont and ARM continue what has been a mostly strong start to the European corporate earnings season. Of the 8 percent of STOXX Europe 600 companies to have reported so far, just over half have met or beaten expectations, StarMine data to the Monday close showed.
For those firms still to report, StarMine predicts each will post an average profit miss of 3.9 percent, although the miss for revenue is seen at an average of just 0.4 percent.
"It all comes down to the earnings season now, and there will be a focus on margins in the first quarter," S&P's Quinn said, adding that he was "underweight" cyclicals such as miners, whose earnings are geared towards global growth trends.
Such sectors have underperformed so far this year, and it was defensive stocks that were Europe's heavyweight gainers.
Leading healthcare heavyweights Novartis (Berlin: NOT.BE - news) , Sanofi (NasdaqGM: GCVRZ - news) and Roche together added most points to the FTSEurofirst 300, extending the sector's marked outperformance in the year to date.
The STOXX Europe 600 healthcare sector is up 15 percent so far in 2013, leading the food & beverage sector , up 11 percent.