Thursday July 30, 06:20 PM
European shares hit highest close since Nov 2008
By Atul Prakash
LONDON, July 30 (Reuters) - European equities hit their
highest closing level in nearly nine months on Thursday and
ended firmer for the 12th out of 14 sessions, as encouraging
earnings results and soothing economic data boosted investor
morale.
The FTSEurofirst 300 index of top European shares
ended 2.2 percent higher at 930.62 points, the highest finish
since early November of last year.
The benchmark index, now up 44 percent since its lifetime
low hit in March, has surged about 14 percent over the past
three weeks, but is still down around 43 percent from its
multi-year peak touched in mid-2007.
Financial stocks were among top gainers, with HSBC (LSE: HSBA.L - news) ,
Barclays (LSE: BARC.L - news) , Lloyds, Royal Bank of Scotland (LSE: RBS.L - news) , BNP Paribas (Paris: FR0000131104 - news) , Societe Generale (Paris: FR0000130809 - news) and
Natixis (Paris: FR0000120685 - news) rising between 1.3 percent and 17.2 percent.
Stronger-than-expected earnings results have given a second
wind to an equities rally that ran out of steam in June after a
38 percent surge in the FTSEurofirst 300 from its record low.
'It is clear from the corporate pronouncements that in the
vast majority of cases, companies' assessment of the situation
is that the worst is over and that the outlook for the second
half is improving,' said Tammo Greetfeld, equity strategist at
UniCredit Research.
Telecoms surged after several companies posted better
results than expected.
Spain's Telefonica (Madrid: BTEF.MC - news) , Europe's top telecoms company,
said its Spanish business was showing signs of stability; France
Telecom reaffirmed its profit outlook and British
telecoms group BT (LSE: BT-A.L - news) beat estimates.
Telefonica, France Telecom (Paris: FR0000133308 - news) , Belgacom (Brussels: BELG.BR - news) and BT all jumped
between 2 and 12.6 percent.
'Increasingly it feels like the time is not right to worry
about this strength running out of steam just yet,' said David
Jones, chief market strategist at IG Index.
Across Europe, the FTSE 100 index, Germany's DAX (Xetra: news) and France's CAC 40 (Paris: news) were up 1.7-2.1 percent.
MINERS SURGE; CHARTS SHOW UPTREND
The basic resources sector has been the top performer since
July 10, with the DJ STOXX index rising 26 percent over
the period, followed by the auto index, up 25 percent,
the insurance index, up 21 percent and the bank index , up 19 percent.
Miners took strength on Thursday from higher metals prices.
BHP Billiton (LSE: BLT.L - news) , Anglo American (LSE: AAL.L - news) , Antofagasta (LSE: ANTO.L - news) , Rio Tinto (LSE: RIO.L - news) , Xstrata (LSE: XTA.L - news) and Eurasian
Natural Resources rose 4.5-8.3 percent.
Among the STOXX 600 index's 95 companies that have
reported results so far, 50 beat analysts' estimates, 2 matched
and 43 missed the estimates, Thomson Reuters (TRI.TO - news) data showed.
The FTSEurofirst 300 stocks currently trade at 11.57 times
expected earnings, the index's highest price-earnings ratio
since May 2008.
The market sentiment improved after data showed the number
of Americans collecting long-term unemployment aid fell to the
lowest in three months in mid-July, suggesting a slowing pace of
layoffs as the economy stabilises.
Charts also suggested a bullish trend. In the past sessions,
the FTSEurofirst 300 index has held technical support at the
bottom of its uptrend channel extending back to mid-July, now at
906 points. The top of the channel is currently at 950 points.
The index has been hovering above its 200-day moving
average, now at around 821 points, for almost two weeks. Before
that, except for some sessions in June, the average had been
lying above the index since December 2007.
Among other stocks, drugmaker AstraZeneca (LSE: AZN.L - news) gained 1.1
percent after raising its full-year earnings forecast.
'The earnings season gives the market a nice tailwind.
Investors should not become careless but we are far from the end
of the world,' said Roger Peeters, strategist at Close Brothers
Seydler.
However, some companies continued to struggle. BASF , the world's largest chemicals maker, fell 1.8 percent
as its second-quarter net income came in below analyst
expectations.
(Additional reporting by Blaise Robinson in Paris; editing by
Simon Jessop)
Keywords: MARKETS EUROPE STOCKS ============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones (news) ............... Wall Street report ..... Nikkei 225 (news) ............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance (GLCE.PK - news) : Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2
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