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European shares hit two-year high; Vodafone gains

Published 11/09/2010, 04:59 AM
Updated 11/09/2010, 05:04 AM
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* FTSEurofirst 300 up 0.4 percent, hits 2-yr high

* Vodafone, Barclays, others gain after statements

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

By Brian Gorman

LONDON, Nov 9 (Reuters) - European shares hit a two-year high on Tuesday, with several companies including Vodafone and Barclays gaining after upbeat profit statements, and with the macroeconomic backdrop boosting sentiment.

At 0947 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 1,115.53 points, after reaching 1,116.19, the highest since September 2008.

The European benchmark is up more than 72 percent from its lifetime low of March, 2009, with several major economies having emerged from recession, helped by stimulus from governments and central banks worldwide.

Vodafone, the world's largest mobile operator by revenue, rose 1.5 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).

"You've had the best of both worlds in equity markets. You've had good data, particularly in jobs, earnings growth and the Fed stimulus has brought bond yields down," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

"The background is right for markets to break above the highs."

Barclays rose 2.1 percent after the bank reported a sharp improvement in bad debts that lifted underlying third-quarter profit.

Miners rose as the price of copper and other metals gained, partly on worries about shortage of supply. Copper has hit a 27-month high even as the dollar has strengthened.

Anglo American, Antofagasta, Fresnillo and Rio Tinto rose between 1.9 and 2 percent.

West African-focused gold miner Randgold Resources rose 3.4 percent after saying it expects output to rise significantly in the fourth quarter, though it posted lower-than-expected production in the third quarter.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC40 rose between 0.3 and 0.6 percent.

CARLSBERG FALLS

There were some negatives among the raft of corporate statements. Carlsberg fell 5 percent after the brewer warned of rising input costs and some markets remaining tough, though it posted a bigger rise than expected in third-quarter operating profit.

Back on the upside, Adecco rose 4 percent after the staffing firm's third-quarter profit beat expectations.

Ireland's CRH rose 2.2 percent said it was stemming the rate of decline in sales of products such as aggregates and bricks, and expects this trend to continue. It had warned on earnings earlier this year due to a faltering U.S. economic recovery.

Persistent worries about euro zone debt may limit gains for indexes in the short term.

"Greece's actions (to reduce its deficit) are not satisfying the market. There are waves of neurosis," said McAlinden. "The banking system in Ireland is reacting with the sovereign situation."

China warned on Tuesday that U.S. easy money could destablise the global economy and inflate asset bubbles, keeping up the pressure on Washington just two days before the start of a G20 leaders summit. (Editing by Hans Peters)

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