European shares hit 5-year highs on solid earnings updates

European stocks climbed to fresh five-year highs this morning on expectations that both euro zone and US monetary policy will remain accommodative for some time.

US officials signalled overnight that the Federal Reserve was in no rush to cut its programme of bond purchases, backing market expectations that the equity-friendly stimulus will not be trimmed until early next year.

The European Central Bank is focusing on the need to stimulate economic growth at its meeting this Thursday, with a small minority in a Reuters poll expecting an interest rate cut.

The pan-European FTSEurofirst 300 rose as high as 1,297.29 points in early deals, setting a five-year high for the third time in a week.

Beiersdorf climbed 4 per cent as the maker of Nivea hand cream raised its full-year sales forecast. Novartis increased 1.3 per cent as the drugmaker was said to identify its animal-health business as a top candidate for a sale.

The Stoxx Europe 600 Index advanced 0.1 percent to 322.87 at 8:08 a.m. in London. EU economic and monetary affairs commissioner Olli Rehn will speak at a news conference at 10.30am in Brussels on the release of autumn economic forecasts.

Agencies