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European shares edge up back to near two-year highs
January 21, 2013 / 9:07 AM / 5 years ago

European shares edge up back to near two-year highs

* FTSEurofirst 300 up 0.1 pct, Euro STOXX 50 up 0.2 pct
    * Prospects of U.S. debt deal buoy equities
    * Tech and software stocks up after Huawei profits rise
    * Richemont slumps after cautious outlook

    By Sudip Kar-Gupta
    LONDON, Jan 21 (Reuters) - European shares edged higher on
Monday, moving back towards their highest level in nearly two
years as sentiment towards riskier assets was buoyed by moves to
break a budget impasse in the United States.
    The pan-European FTSEurofirst 300 index rose 0.1
percent to 1,165.00 points, having reached a near two-year high
of 1,170.29 points - its best level since early March 2011 -
earlier this month.
    The euro zone's blue-chip Euro STOXX 50 advanced
by 0.2 percent to 2,715.96 points.
    Traders cited optimism that the United States would reach a
deal to raise its debt ceiling as a key factor, after the
Republican party said it would seek to pass a three-month
extension of federal borrowing authority next week.
    "There's a bit of encouragement coming out of the U.S.,"
said Toby Campbell-Gray, head of trading at Tavira Securities in
    Share markets had remained resilient in the face of an
uncertain economic outlook since many investors had stepped in
to buy stocks on dips.
    "Bad news is taken well and good news is taken even better,"
said Campbell-Gray.
    The STOXX Europe 600 technology index was among the
best-performing sectors, with traders citing higher profits from
telecoms equipment maker Huawei Technologies as a
    Mirabaud Securities European equity research analyst Susan
Anthony backed stocks in the sector such as SAP, which
was up 0.7 percent, and Software AG, which gained 0.6
    Danish industrial enzymes maker Novozymes also
performed well, topping the FTSEurofirst 300 index's leaderboard
with a 2.6 percent rise after it reported a bigger-than-expected
rise in fourth quarter operating profits. 
    Shares in Swiss luxury goods group Richemont 
slumped 6 percent after the company issued a cautious outlook.
    Traders said technical analysis charts pointed to a
long-term bullish outlook for European shares.
    The Euro STOXX 50 index has risen by more than 30 percent
since mid-2012 after the European Central Bank pledged fresh
measures to protect the euro from the effects of the region's
sovereign debt crisis.
    Returns on euro zone equities were 9.5 percent above the
triple-A rated German government bond, while U.S. shares offered
a return 7.5 percent higher than the 10-year Treasury,
Datastream data showed.
    Banque Syz fund manager Armand Suchet expected more stock
gains, highlighting banking shares.
    "We believe there is still some upside on European markets,"
said Suchet.

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