European Shares at Multi-Year Highs on Stimulus Hopes
Europe's top equity indexes bounced up to multi-year highs on Tuesday, buoyed by the breach of key technical levels, a crop of upbeat corporate outlooks and prospects of continued stimulus from global central banks.
The European Central Bank, the Bank of England and the Bank of Japan are all expected to stick to ultra easy monetary policy at meetings this week, following on from reassurances by U.S. Federal Reserve officials that their stimulus program is also here to stay, for now.
The pan-European FTSEurofirst 300 Index provisionally closed up 1.8 percent at 1,189.09 points, its highest finish in 4-1/2 years but just short of the February 2011 intra-day peak of 1,191.56 points.
"There are many European stocks hitting yearly new highs and that's positive," said Riccardo Ronco, head of technical analysis at Aviate Global, noting particular strength in industrials, consumer discretionary and consumer staples.
"I am not fighting that kind of information because it is very strong. But this is a very messy market... You should tighten your stop losses and you have to be in the right segments."
European shares were also boosted by the news that euro zone finance ministers have agreed to bail out Cyprus by the end of March, although they have yet to work out details of the 17 billion euro ($22.1 billion) financial aid package.
Upbeat earnings came from the likes of Germany's Deutsche Post on Tuesday, which closed more than five percent higher after the firm released a fourth-quarter update. CEO Frank Appel told CNBC on Monday that he expected the first half of 2013 to be challenging, but was confident of meeting the company's guidance.
U.K. based bank Standard Chartered released full-year results showing that profit before tax had beaten estimates; shares on Tuesday closed around three percent higher. Service company Serco led gainers on London's FTSE 100, closing 8.89 percent up. The company released earnings that were just above expectations and hiked its dividend.
(Read More: UK Service Sector Growth More Than Expected)
U.K.-based miners Xstrata and Glencore both released earnings highlighting a fall in profits due to impairment charges with weak commodity prices. However with earnings meeting expectations, Xstrata closed 5.73 percent higher, and Xstrata closed 6.78 percent higher.