European shares hit highs on U.S. budget deal optimism

Reuters

LONDON, Oct 15 (Reuters) - A major European stock index hita 2-1/2-year high and Germany's DAX a record peak on Tuesday ongrowing optimism that U.S. lawmakers would soon agree a deal tore-open the government and avoid a possible default.

The Euro STOXX 50 rose 0.4 percent to itshighest since mid-2011 and the DAX gained 0.5 percentto a new high after U.S. Senate Majority Leader Harry Reid, aDemocrat, and his Republican counterpart, Mitch McConnell, endeda day of talks on Monday, with Reid saying they had made"tremendous progress".

"Optimism that a deal will soon be agreed continues toprevail. Relief that politicians have taken the U.S. to the edgeand back again is clear," said Keith Bowman, equity analyst atHargreaves Lansdown.

"The move allows investors to again concentrate onfundamentals, including the now unfolding third-quarter resultsseason."

The plan under discussion would end a partial governmentshutdown and raise the debt ceiling by enough to cover thecountry's borrowing needs at least through mid-February 2014,according to a source familiar with the talks.

The FTSEurofirst 300 index of top European sharesrose 0.7 percent to 1,259.35 points after setting a two-weekhigh. The index is up more than 10 percent this year.

However, Schindler, the top decliner, fell 5.3percent, after saying net profit fell to 368 million Swissfrancs ($405.62 million) during the first nine months of theyear.

View Comments (1)