UPDATE 2-Trade optimism, upbeat earnings send European shares to 4-year peak

  • Reuters
  • Stock Market News
UPDATE 2-Trade optimism, upbeat earnings send European shares to 4-year peak
Credit: © Reuters.

* STOXX 600 is now 2% away from record high

* BoE surprises as two members vote for rate cut

* Siemens hits more than 1-yr high on upbeat results

* Lufthansa jumps after unveiling cost-cutting plan

* Hiscox tumbles after brokerage downgrade (Updates prices)

By Susan Mathew

Nov 7 (Reuters) - European shares rose for a fifth straight session on Thursday to hit fresh four year highs as investors cheered signs of progress in U.S.-China trade talks and largely positive earnings reports from a host of companies.

Shares of Siemens SIEGn.DE hit their highest in more than a year after the German industrial company beat fourth-quarter profit expectations, while Italy's biggest bank UniCredit CRDI.MI rose 6% after announcing its first share buyback in more than a decade after solid third-quarter earnings. LHAG.DE jumped 6.8% on plans to cut costs at some of its units to revive profit. The German airline's shares helped boost the wider travel and leisure index .SXTP by 1.3%, making it one of the top gainers among the major European sub-sectors. the trade front, China's commerce ministry said the world's two economic giants were working on a deal that would roll back trade tariffs in different stages. are still hurdles to be overcome but it is encouraging that, contrary to last spring, Chinese negotiators are sending more positive signals, as well their U.S. counterparts," said Raoul Leering, head of international trade analysis at ING.

The news sparked a broad-based rally in Europe, while Wall Street was pushed to a record high. Trade-sensitive Frankfurt shares .GDAXI rose 0.8% to close at their highest level since February 2018. .N

It also helped investors shrug off another weak data point from Germany showing industrial output fell more than expected in September. FTSE 100 .FTSE rose 0.1% as the pound GBP= weakened after two Bank of England officials voted to lower interest rates on Thursday, contrary to expectations of a unanimous decision to hold rates. .L

"That suggests that the Bank is very unlikely to follow through with its signalled rate hikes (if Brexit goes smoothly) any time soon," ING's developed markets economist James Smith said.

But a 9.7% tumble in insurer Hiscox HSX.L on brokerage downgrades and a 2.7% slip in London Stock Exchange Group LSE.L after it said it would consult with members regarding a shorter trading day, saw the FTSE post the smallest gains among regional peers. FTSE midcap index .FTMC and Irish stocks .ISEQ gained 1.1% and 1.3%,respectively.

The pan-European STOXX 600 index .STOXX closed up 0.4%. It is now a little over 2% away from its record high hit in April 2015.

Among the top gainers across European sub-sectors were automakers .SXAP and miners .SXPP , while defensive plays such as telecoms .SXKP and utilities .SX6P fell, suggesting higher risk appetite.

The world's largest steelmaker ArcelorMittal MT.AS jumped 6.7% on better-than-expected results. Shares in wind turbine maker Vestas VWS.CO rose 11% to the top of the STOXX 600 after it reported forecast-beating quarterly operating profit. gas and power group Engie ENGIE.PA posted its worst day in more than eight months on less optimistic guidance, taking the utility sector .SX6P down 1.9% for its worst day in a month.

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