Miners lift Europe shares to 27-mth closing high

* FTSEurofirst 300 ends up 1.1 pct at fresh 27-month high

* Miners gain as copper hits record high on supply, dollar

* Paper company shares rise after UPM-Kymmene deal

By Harpreet Bhal

LONDON, Dec 21 (BestGrowthStock) – European shares hit a fresh
27-month closing high on Tuesday, with mining shares boosted by
strong metals prices while Finnish forestry group UPM-Kymmene
(UPM1V.HE: ) rose after saying it was buying a debt-laden rival.

The pan-European FTSEurofirst 300 (.FTEU3: ) index of top
shares ended up 1.1 at 1,145.60 points, the highest closing
level since late September 2008, though volumes were low due to
the year-end holiday season.

The index has risen 7.2 percent so far this month, on track
to post its biggest monthly gains since July 2009, and is up 9.4
percent in the year-to-date.

“U.S. economic policy has improved confidence in the outlook
for growth and corporate earnings next year, and investors are
taking the view that bond markets are no longer the place to
be,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

Mining shares were lifted by a rally in metals prices, with
copper (CMCU3: ) hitting a record high on supply concerns after
Chile’s Collahuasi mine halted shipments, and on a weak dollar.
Xstrata (XTA.L: ), Eurasian Natural Resources (ENRC.L: ) and Vedanta
Resources (VED.L: ) rose 3.2 to 3.5 percent.

Also helping sentiment in the sector, Australia’s biggest
mining companies may have won a long-running battle with Prime
Minister Julia Gillard after a tax panel recommended the
government pick up future state royalty payments under its mine
tax reform package. [ID:nL3E6NL03W]

Merger and acqusition activity helped lift individual
shares. Finland’s UPM-Kymmene (UPM1V.HE: ) rose 6.8 percent after
the forestry group said it was buying debt-laden rival
Myllykoski in a move which brings much needed consolidation to
Europe’s paper industry. [ID:nLDE6BK03E]

Rival Stora Enso (STERV.HE: ) added 8.4 percent.

Dutch chemical firm DSM (DSMN.AS: ) rose 3.9 percent after the
world’s largest vitamins maker said it was buying U.S. baby food
ingredients maker Martek Biosciences Corp (MATK.O: ) for $1.1
billion, kicking off an expected acquisition spree.
[ID:nLDE6BK04U].

Other gainers included Carnival (CCL.L: ), which added 3.7
percent after the world’s largest cruise operator reported a
rise in fourth-quarter profit (Read more your timing to make a profit.) and it issued a 2011 forecast that
exceeded estimates. [ID:nLDE6BK1HD]

DEBT FEARS LINGER

Concerns over the euro zone debt crisis lingered as ratings
agency Moody’s said it may cut Portugal’s credit rating, and
Spain had to pay a higher price in its final debt sale of the
year. [ID:nLDE6BK0HE]

China said it backed the steps taken by European authorities
to tackle the region’s debt problems, but made clear it would
like to see the measures having more effect.

“The sovereign debt crisis will be a risk to growth and a
source of instability for markets in 2011. The pressure is
mounting on the European Union to do something to deal with the
problem,” Lenhoff said.

On the downside, BSkyB (BSY.L: ) fell 0.7 percent, reversing
earlier gains, after British Business Secretary Vince Cable says
he had “declared war” on media magnate Rupert Murdoch raising
question marks over the likelihood of Murdoch’s News Corp
(NWSA.O: ) succeeding in taking full ownership of the pay-TV
operator.

On the technical front, indicators pointed to a bullish
trend for equity markets. The Euro STOXX 50 (.STOXX50E: ), the
euro zone’s blue-chip index, rose 1.3 percent to 2,876.99
points, holding above its 61.8 percent Fibonacci retracement
from a high in April to a low in May.

“This is the traditionally best season of the year. On top
of this, active money managers have had one of the worst years
in history. So, they try to play catch-up and buy every dip,”
said Philippe Gijsels, head of research at BNP Paribas Fortis
Global Markets, in Brussels.
(Additional reporting by Atul Prakash; Editing by Jon
Loades-Carter)

Miners lift Europe shares to 27-mth closing high