Euro Stocks Advance, Boosted by Telecoms

European shares advanced Tuesday as Vodafone led telecoms higher and a rebound in U.S. pending-home sales helped improve market sentiment.

The FTSEurofirst 300 index of top European shares closed up 14.62, or 1.9 percent, at 791.90 after being down as much as 0.9 percent earlier. That follows a 2.4-percent decline in the prior session and a 45-percent slide last year.

Data showed that pending sales of existing U.S. homes rose in December for the first time since August, boosting markets in the U.S. and Europe.

"It's good to see positive news flow from the U.S. housing markets. This is encouraging as markets seem to react again to good news," said Philippe Gijsels, strategist at Fortis Bank in Brussels.

"Although on the corporate side news is set to remain bad and we're still in a bear market, this is a glimmer of hope," Gijsels added.

Telecoms were the biggest sector gainers, with the DJ Stoxx telecoms index up 4.4 percent.

Vodafone, the world's largest mobile-phone group by sales, rose 7 percent after the company raised its full-year forecast and beat its own third-quarter revenue forecast.

Deutsche Telekom, France Telecom and BT Group all gained.

Across Europe, the FT-SE 100-share index rose 2.1 percent, Germany's Xetra Dax index gained 2.4 percent and France's CAC 40-share index added 1.8 percent.

Utilities were the second-biggest sector gainer, with E.ON, EDF, GDF Suez and Iberdrola all up more than 2 percent.

Mining stocks also rose, with the DJ Stoxx basic resources index up 2.6 percent.

Shares in mining company Rio Tinto advanced 4.3 percent. The Australian newspaper on Tuesday reported that Chinese state-owned Chinalco is preparing a bigger-than-expected $20 billion deal that could boost its stake in Rio Tinto to between 15 and 20 percent.

BNP Paribas was among the few decliners, sliding 2.5 percent, after Fitch Ratings changed its credit rating on the stock to "negative" from "stable."

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