Miners, telecoms lead European shares to 5-mth highs

* FTSEurofirst 300 up 0.2 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 Brian Gorman

LONDON, Oct 14 (BestGrowthStock) – European shares hit their highest
in more than five months on Thursday, boosted by hopes of more
monetary easing in the United States, a robust earnings season,
and with miners higher on stronger metals prices.

However, a weaker banking sector capped gains for key
indexes.

By 1044 GMT, the FTSEurofirst 300 index of top European
shares (.FTEU3: ) was up 0.2 percent at 1,088.11 points after
touching 1,094.13 points, the highest since late April.

“The earnings season has been good, and guidance from
corporates is for recovery of profits. We’re trading at 25-year
low PE ratios,” said Dean Tenerelli, fund manager at T Rowe
Price.

“Stocks, relative to bonds, are extremely cheap. There is a
lot of valuation space for the market to continue to go higher,”
Tenerelli said, adding industrial stocks would continue to do
well.

He also said the market was supported by expectations of
more quantitative easing by the U.S. Federal Reserve.

Telecoms were among the major gainers.

Vodafone (VOD.L: ) rose 1.7 percent following an upgrade from
Nomura, which cited strong costs reduction. Telefonica (TEF.MC: )
and Telecom Italia (TLIT.MI: ) rose 1.1 and 2.1 percent
respectively.

Miners also featured among the risers, tracking gains 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.

Fresnillo (FRES.L: ), Rio Tinto (RIO.L: ) and Xstrata (XTA.L: )
rose between 0.7 and 2.4 percent.

Appetite for risky assets such as equities jumped, with the
VDAX-NEW volatility index (.V1XI: ) falling 8 percent and hitting
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.

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

Across Europe, the FTSE 100 (.FTSE: ) was down 0.4 percent
having hit its highest in more than five months earlier;
Germany’s DAX (.GDAXI: ) rose 0.5 percent, having hit a two-year
high and France’s CAC 40 (.FCHI: ) was flat.

BANKS FALL

However, the banking sector (.SX7P: ) capped the index’s
gains, with traders citing ongoing concern about regulation.

BNP Paribas (BNPP.PA: ), Barclays (BARC.L: ) and Societe
Generale (SOGN.PA: ) fell between 2.7 and 3.5 percent.

Belgian supermarket group Delhaize (DELB.BR: ) fell 3.7
percent after Deutsche Bank cut its earnings estimates and its
target price to 54 euros ($75.95) from 58 euros.

Strong company results have improved sentiment this week.
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 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 edged up another 0.1 percent on Thursday.

Investors will watch the weekly U.S. jobless claims report,
due at 1230 GMT, for indications on the strength of the economic
recovery.
(Additional reporting by Atul Prakash; Editing by Sharon
Lindores)
($1=.7110 Euro)

Miners, telecoms lead European shares to 5-mth highs