LONDON Nov 29 European stocks rose early on
Thursday, echoing gains overnight in the United States as law
makers there boosted confidence that a deal on fiscal policy
would be struck, with basic resources the top sectoral gainer.
By 0801 GMT, the FTSEurofirst300 was up 3.8 points,
or 0.4 percent, at 1,113.14. The STOXX Europe 600 Basic
Resources index, meanwhile, was up 1.2 percent.
Appetite for equities grew after U.S. President Barack Obama
and U.S. House of Representatives Speaker John Boehner signaled
intent that the Republicans and the White House could soon
strike a deal to avoid a $600 billion 'fiscal cliff' of
Rising expectations for a deal have helped European shares
bounce off the near four-month lows struck in the middle of
November and recover 4 percent in the last seven trading days.
"The default assumption appears to be that a deal will be
reached before the year-end deadline," Ian Williams, equity
strategist at Peel Hunt, said.
Williams, however, cautioned that there could still be many
bumps in the road before an agreement is reached, laying the
foundations for a potentially choppy final month of the year.
"Investors would be well advised to treat the smoke signals
from the ongoing fiscal negotiations in Washington with a degree
of caution; they are only increasing the volatility in markets,
which are already vulnerable to low-volume moves," he said.