European shares rise led by Intesa but LSE, Deutsche Boerse weigh

MILAN, Feb 27 (Reuters) - European shares rose in early trading on Monday, helped by some well-received earning updates and by a rally in Intesa Sanpaolo (Amsterdam: IO6.AS - news) shares following the Italian bank's decision to drop plans to take over insurer Generali (EUREX: 566030.EX - news) .

The pan-European STOXX 600 index was up 0.1 percent. Gains were capped a sharp drop in London Stock Exchange (Other OTC: LDNXF - news) and Deutsche Boerse (IOB: 0H3T.IL - news) shares after LSE said its proposed merger with the German exchange was unlikely to be approved by the European Commission.

Intesa Sanpaolo soared more than 5 percent, leading gainers on the STOXX. Italy's biggest retail bank abandoned plans to join forces with Generali, saying a tie-up would not create value for its shareholders. Generali fell 5 percent.

Among top gainers were Rotork (Frankfurt: RO41.F - news) , up 4.5 percent, after the British company increased its total dividend and said orders rose, while business supplies distributor Bunzl (LSE: BNZL.L - news) also rose sharply after a better-than-expected rise in profits. (Reporting by Danilo Masoni, Editing by Helen Reid)