UPDATE 2-European stocks close higher as commodities shares rally

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* Miners rally on the strong commodity prices
* Euro zone business activity resumes growth in July
* Swiss market hit as defensive stocks weigh

(Updates to market close)
By Sruthi Shankar
Aug 5 (Reuters) - Positive earnings reports and a surge in
commodities shares lifted European stock markets on Wednesday,
but losses in defensive sectors and worries about surging
coronavirus cases globally tempered the mood.
London-listed mining groups Rio Tinto RIO.L , BHP Group
BPPB.L and Glencore GLEN.L provided the biggest boost,
sending the broader mining index .SXPP up 4.0% on the back of
stronger metal prices. MET/L GOL/
Oil majors BP BP.L and Total TOTF.PA gained about 2% as
oil prices surged on a drop in U.S. crude inventories and a weak
dollar. O/R
The broader pan-European STOXX 600 index .STOXX ended 0.5%
higher, with London's commodity-heavy FTSE 100 .FTSE rising
1.1% and Germany's DAX .GDAXI up 0.5%.
"Equity markets rallied alongside continued strength in
precious metals," Stephen Gallo, European head of FX strategy,
said in a note. "The headline PMI numbers from Europe certainly
did not harm risk assets."
IHS Markit's final reading of euro zone business activity
showed the bloc returned to modest growth in July as coronavirus
restrictions were lifted. Separate data showed the volume of
retail sales rebounded in June to levels recorded in February.
The numbers, along with some positive earnings reports,
helped investors look past a worsening of diplomatic ties
between the United States and China and rising COVID-19 cases in
parts of Europe and the United States.

In earnings-driven moves, German logistics group Deutsche
Post AG DPWGn.DE gained 2.5% after reporting a
better-than-forecast rise in operating profit, benefitting from
a jump in ecommerce during the pandemic. Chipmaker Dialog Semiconductor DLGS.DE rose 9.1% after
posting second-quarter revenue above its previous estimate,
while residential real estate company Vonovia VNAn.DE was up
3% having confirmed its guidance for the year. Travel & leisure stocks .SXTP extended gains for a third
straight session, with British Airways-owner IAG ICAG.L ,
Lufthansa LHAG.DE and Easyjet EZJ.L up between 6.5% and
10.5%.
"Manufacturing PMIs earlier this week are certainly helping
the cyclical story, but there is temporary nature to the current
outperformance," said Edward Park, deputy chief investment
officer at Brooks Macdonald Asset Management.
Among the decliners, BMW BMWG.DE fell 3.5% as a 25% fall
in deliveries of luxury cars during lockdowns pushed the
carmaker to a second-quarter operating loss. Defensive sectors such as food & beverage .SX3P ,
healthcare .SXDP and telecoms .SXKP , which tend to decouple
from the economic cycle, also fell, knocking 0.6% off the Swiss
equities index .SSMI which is heavy on such companies.