European shares at 5-mth highs; technicals improve

* FTSEurofirst 300 up 0.4 percent; highest since late April

* Miners among top gainers as weaker dollar boosts metals

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Atul Prakash

LONDON, Oct 14 (BestGrowthStock) – European shares climbed to their
highest in more than five months on Thursday, with growing
expectations of more U.S. monetary easing and hopes of a robust
earnings season boosting demand for riskier assets.

The technical outlook improved, with a key index breaching
strong resistance and the 50-day moving average getting closer
to its 200-day moving average — generally a positive sign.

At 0848 GMT, the FTSEurofirst 300 index of top European
shares (.FTEU3: ) was up 0.4 percent at 1,090.76 points after
touching a high of 1,094.13, the highest since late April.

It climbed 1.4 percent on Wednesday and is up 4.3 percent
this year.

Appetite for risky assets such as equities jumped, with the
VDAX-NEW volatility index (.V1XI: ) falling 9.5 percent to its
lowest in almost three years. The lower the index, which is
based on sell and buy options on Frankfurt’s top-30 stocks
(0#.GDAXI: ), the higher the market’s desire to take risk.

“Investor appetite will be helped by consensus-beating
results, while the macro environment is being supported by the
fact that the authorities appear ready to provide the required
support to secure the economic recovery,” said Henk Potts,
equity strategist at Barclays Wealth.

“And that should be good news for heavyweight sectors,
especially for miners.”

Miners featured among the top gainers as the STOXX Europe
Basic Resources index rose 0.9 percent, tracking a sharp gain in
metals prices.

Gold (XAU=: ) hit a record high, silver (XAG=: ) climbed to a
30-year peak and copper (MCU3: ) rose to its highest level in 27
months on a steep fall in the dollar, making commodities cheaper
for holders of other currencies.

BHP Billiton (BLT.L: ), Antofagasta (ANTO.L: ), Rio Tinto
(RIO.L: ), Xstrata (XTA.L: ) and ENRC (ENRC.L: ) rose 0.3-1.8 percent.

“Stock indexes are breaking out of their six-month range,
and this has triggered a sharp rise in risk appetite,” says
David Thebault, head of quantitative sales trading at Global
Equities in Paris.

“With Bund yields at record lows, investors can’t ignore the
strong dividend yields that equities offer. The breakout of the
range is probably the catalyst investors have been waiting for
to come back to stocks and capture the high dividend yieds.”

EARNINGS BOOST

Strong company results improved sentiment. Intel (INTC.O: )
forecast upbeat fourth-quarter sales and margins on Tuesday,
JPMorgan (JPM.N: ) on Wednesday posted a 23 percent rise in
quarterly profit and LVMH (LVMH.PA: ) beat forecasts on Thursday,
with a 14 percent rise in comparable third-quarter sales.

The market was also helped by expectations that U.S. policy
makers were preparing to inject more cash into the economy.

The technical picture improved as the blue-chip Euro STOXX
50 (.STOXX50E: ) breached key resistance of 2,740.32, its 61.8
percent retracement of an April high to a May low, on Wednesday
and rose about its August peak of 2,849.45 on Thursday.

The index’s 50-day moving average, now at 2,740.71, moved
closer to the 200-day moving average at 2,764.26, raising
prospects that the 50-day average might cross the 200-day
average, which would mean a bullish signal.

“Technical outlook is good because we have buy signals after
a sideways movement during the last six months. There is high
momentum to the upside,” said Achim Matzke, technical strategist
at Commerzbank in Frankfurt.

Across Europe, the FTSE 100 (.FTSE: ) hit its highest in more
than five months, Germany’s DAX (.GDAXI: ) rose to a two-year high
and France’s CAC 40 (.FCHI: ) rose to its highest since May.
(Additional reporting by Blaise Robinson in Paris; Editing by
Michael Shields)

European shares at 5-mth highs; technicals improve