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Europe stocks inch up, helped by US stimulus hopes

Published 10/29/2010, 12:55 PM
Updated 10/29/2010, 01:00 PM

* FTSEurofirst 300 up 0.1 pct, gains 2.4 pct on the month

* Euro STOXX 50 ends flat, above key support level

* British Airlines, Iberia fall as results fail to impress

* For up-to-the-minute market news, click on

By Blaise Robinson

PARIS, Oct 29 (Reuters) - European stocks ended slightly higher on Friday, posting a second consecutive monthly gain, as U.S. GDP data cemented expectations of monetary easing from the Federal Reserve next week.

The FTSEurofirst 300 index of top European shares closed 0.1 percent higher at 1,086.61 points, up 2.4 percent for the month.

The Euro STOXX 50, the euro zone's blue-chip index, ended down 0.02 percent at 2,844.99 points, staying above a key support level tested during the session, the 38.2 percent Fibonacci retracement of the index's fall from a 2007 high to a 2009 low.

Data showed U.S. gross domestic product expanded at a 2 percent annual rate as expected in the third quarter, but not enough to change perceptions the Fed would kick off a new programme of quantitative easing.

"This figure clearly shows a slowdown in growth without pointing towards a double dip. Overall, it doesn't change the expectation of more monetary easing from the Fed," BNP Paribas economist Jean-Marc Lucas said.

The Federal Open Market Committee meets next week, and estimates for how long the Fed will print money and how much it will eventually spend varied widely, from $250 billion to as much as $2 trillion, according to a Reuters poll.

Utilities, which have been among the worst performers so far this year, rallied on Friday, with Centrica up 3.2 percent and GDF Suez up 1.5 percent.

Around Europe, UK's FTSE 100 index ended down 0.05 percent, Germany's DAX index up 0.09 percent, and France's CAC 40 down 0.03 percent.

Portugal's PSI 20 index gained 0.5 percent after the country's minority government and opposition Social Democrats said they were ready to renew talks to approve the 2011 budget.

Banco Espirito Santo gained 1.1 percent, and Banco BPI rose 1.5 percent.

British Airways dropped 3.6 percent, and Iberia fell 2.5 percent, trimming recent lofty gains, after the two merger partners' results failed to impress investors.

Satellite operator Eutelsat dropped 1.7 percent after the company said it had lost a satellite, though it said it was fully insured and the loss would not change its financial expectations for the year. (Editing by Will Waterman)

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