European shares rise on prospect of U.S. debt deal, Accor leads

Reuters

LONDON, Oct 11 (Reuters) - European shares rose on Friday,lifted by prospects of a deal to end the U.S. debt stalemate.

The pan-European FTSEurofirst 300 index gained 0.3percent to 1,249.23 points in early trade, building on gainsfrom the previous session when the index marked its biggestdaily gain in a month with a 1.7 percent rise.

The euro zone's blue-chip Euro STOXX 50 index advanced 0.2 percent to 2,974.49 points.

French hotel group Accor topped the FTSEurofirst300 leaderboard with a 2 percent rise after investment bankCitigroup's upgraded the stock to a "buy".

Global equities have lost ground this month since the U.S.government partially shut down due to the budget stalemate,leading to concerns about the $16.7 trillion U.S debt ceilingwhich Treasury Secretary Jack Lew said the government will hitno later than Oct. 17.

But President Barack Obama and Republican leaders appearedready to end the deadlock after meeting at the White House onThursday.

Darren Courtney-Cook, head of trading at Central MarketsInvestment Management, said even a short-term extension to theU.S. debt limit would be enough to soothe investors' nerves.

"Even if they just kick the can down the road again, thefact that there won't be a default is why the markets would takeit so positively. There may be some volatility going up to thewire, but most people expect a year-end rally," he said.

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