* FTSEurofirst 300 up 0.7 percent; hits 2-year highs
* Miners top the gainers list; track strong metals prices
* Technical picture bright; market to witness year-end rally
By Atul Prakash
LONDON, Nov 9 (Reuters) - European shares rose to their highest level in more than two years on Tuesday, on strong company earnings reports and with recent encouraging macroeconomic numbers and the U.S. Federal Reserve's stimulus plans attracting investors towards riskier assets.
The technical picture improved following recent gains, with chartists predicting a continuation of the rally in the last months of 2010. The VDAX-NEW volatility index, one of Europe's main barometer of investor anxiety, also signalled a rise in the market's risk appetite.
At 1217 GMT the FTSEurofirst 300 index of top European shares was up 0.7 percent at 1,118.27 points after touching 1,119.80, the highest level since Sept. 26, 2008, just days after the collapse of Lehman Brothers.
The index is up 73 percent from its lifetime low in March, 2009, but is up just 7 percent this year.
Miners topped the gainers list, tracking a rise in metals prices that jumped on improving demand and falling inventories. Copper hovered near record highs, while nickel, aluminium and zinc rose 1.3 to 2.5 percent.
BHP Billiton, Antofagasta and Xstrata rose 2.1 to 3.1 percent.
"Quantitative easing, decent macroeconomic data and valuations have helped equities to move higher. Earnings have also played a big role," said Klaus Wiener, head of research at Generali Investments, in Cologne.
"We are in a year-end rally and I don't see any disturbance from the macro data side. The only thing which could be a bit of a problem is the situation in countries like Ireland but this is not being perceived as something which could derail the whole monetary union project."
The premium investors demand to hold Irish and Portuguese debt hit new highs. A political impasse in Dublin ahead of a budget vote and a Portuguese debt auction on Wednesday unnerved investors already jittery after Germany and France have proposed bondholders take some of the pain in any future debt restructurings.
TECHNICAL OUTLOOK
Chartists said most technical indicators, such as short- and long-term uptrends and various momentum oscillators, continued to support the bull case for the FTSEeurofirst 300, which hovered around its April peak of 1,115.
"If it manages to break and hold above that critical level, which also coincides with a 50-percent retracement of the long-term downtrend, it will signal a continuation of the rally, with the next upside target of 1,200," said Bill McNamara, technical analyst at Charles Stanley.
Encouraging earnings and company updates also boosted market sentiment. Deutsche Post DHL rose 3.4 percent as it tweaked its 2010 outlook and said it expects earnings growth to continue into next year.
Barclays climbed 3.3 percent after upbeat guidance on shrinking bad debts and on capital strength in the face of tougher global rules offset a weak performance at Barclays Capital.
Vodafone, the world's top mobile operator by revenue, gained 0.4 percent after raising its full-year profit outlook and saying it had agreed to sell its interests in Japanese carrier SoftBank for 3.1 billion pounds ($5 billion). (Editing by Greg Mahlich)