LONDON, Jan 9 (Reuters) - European shares gained further ground on Tuesday, rising to new 2 1/2 year highs as consumer sectors got a boost from strong retailer results, and indebted telecoms group Altice surged on plans to spin off its U.S. business.
The pan-European STOXX 600 index gained 0.3 percent to 399 points, its highest since August 2015 and edging closer to an all-time high of 414.06 points. Euro zone stocks rose 0.2 percent.
Consumer staples and financials were the biggest boosts to the pan-European index after UK supermarket Morrisons reported strong results.
Morrisons rose 3.7 percent after reporting stronger than expected sales over the crucial Christmas period.
Peers Sainsbury's and Marks & Spencer gained 3.2 and 2 percent respectively and the European retail sector index was up 0.3 percent.
Britain's FTSE 100 was up 0.3 percent, outperforming European peers and recovering from Monday's fall.
Telecoms and cable group Altice stole the spotlight, jumping 6.5 percent as investors welcomed a decision to spin off its U.S. unit and simplifying the group's structure in the process.
Analysts at brokerage Raymond James said the move could also make the Altice European arm a possible acquisition target for rival French telecoms companies.
French catering company Sodexo fell 2.8 percent after downgrades from Kepler Cheuvreux and Credit Suisse.
(Reporting by Helen Reid; editing by Tom Pfeiffer)