Strong results hoist European shares to six-year high

Tue May 13, 2014 5:36am EDT
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By Emelia Sithole-Matarise

LONDON - European shares rallied on Tuesday with a key index hitting a six-year highs as a strong performance in U.S. equities and upbeat updates from some blue-chip companies boosted appetite for riskier assets.

The dollar and Asian shares rose earlier after the Dow .DJI and the S&P 500 .SPX closed at record peaks on Monday, led by a rebound in pummeled internet and biotech stocks on the back of strong corporate results and an improving economic outlook .N.

Indian markets led Asian shares higher on expectations an election victory for the nationalist opposition BJP party, viewed as business-friendly, would spur a revival in the region's third biggest economy.

The run of positive corporate news continued in Europe, with Germany's ThyssenKrupp (TKAG.DE: Quote) raising its full-year earnings outlook on Tuesday, while aerospace group Airbus Group (AIR.PA: Quote) posted a narrower-than-expected drop in core earnings and reaffirmed its financial goals for the year.

The pan-European FTSEurofirst 300 .FTEU3 index rose 0.2 percent to 1,367.60 points, its highest level since May 2008. Britain's FTSE .FTSE was up 0.2 percent after briefly hitting its highest point in roughly a year.

Sentiment was also supported by the European Central Bank's clearest signal yet last week that it was poised to ease monetary policy further next month to support the economic recovery. Investors were also focused on Germany's ZEW monthly sentiment poll for its reading of the euro zone's biggest economy.

"We are still slightly long (stocks) going into the ZEW, as sentiment for stocks has markedly improved over the last couple of days," said Markus Huber, senior sales trader at Peregrine and Black.

"Expectations that the ECB will act soon in a decisive manner to fight low inflation and the rise of the euro seem to outweigh worries that potentially further and much harsher economic sanctions could be imposed on Russia soon," he said.   Continued...

A man smokes a cigarette outside The London Stock Exchange November 11, 2013. REUTERS/Eddie Keogh