European shares eye 5-year peaks buoyed by solid earnings


* FTSEurofirst 300 up 0.2 pct, near earlier 5-year peaks

* DAX hits new record high

* Aggreko and Assa Abloy rise on solid earnings updates

By Sudip Kar-Gupta

LONDON, Oct 28 (Reuters) - A key pan-European equity indexclimbed back towards a 5-year peak on Monday, while Germany'sDAX touched a fresh record high, as solid corporateearnings lifted regional stock markets.

The pan-European FTSEurofirst 300 index rose 0.2percent to 1,287.52 points in early session trade, close to a5-year high of 1,291.93 points.

The euro zone's blue-chip Euro STOXX 50 index advanced by 0.2 percent to 3,040.19 points while the German DAXalso rose by as much as 0.4 percent to touch a new record highof 9,017.95 points.

"We have seen some strong performance from European equitiesover the summer, but would argue there is more to come," saidSchroders' European equities fund manager Martin Skanberg.

Power company Aggreko topped the FTSEurofirst 300'sleaderboard with a 4.3 percent rise after reporting thatunderlying revenues and trading margins in the three months tothe end of September were up from the same period a year ago.

Lock maker Assa Abloy also rose by 3.1 percentafter posting third quarter earnings ahead of market forecasts.

Tim Gregory, head of global equities at Psigma InvestmentManagement, said robust results from leading European companieswould continue to support European equity markets.

According to data from Thomson Reuters StarMine, 53 percentof the companies on the pan-European STOXX 600 index have beaten or met market expectations with their third quarterearnings updates so far.

Schroders' fund manager Skanberg also said that the factthat some global investors remained relatively "underweight" onEuropean equities, compared to U.S. or Japanese equities, couldgive another boost to European shares as those investors lookedto increase their allocations to the region.

"While there has been greater investor enthusiasm for theasset class recently, net inflows into European equities onlyreally began to increase in July 2013," said Skanberg.

"Allocations to Europe remain low, with European Unionequities still an underweight in many portfolios. This should besupportive for flows into Europe as and when quantitative easingends in the U.S.," he added.

The FTSEurofirst 300 is up 13 percent since the start of2013, while Germany's DAX has risen 18 percent.

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