European shares hit 5-year highs for third time in a week
European stocks climbed to fresh five-year highs today on expectations that both euro zone and US monetary policy will remain accommodative for some time, but mixed corporate earnings kept gains in check.
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 seen 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.
Gains, though, were capped by post-earnings weakness in the likes of insurer RSA and auto maker BMW.
"We have had a little bit of an overbought situation but the uptrend is still intact," said Petra Kerssenbrock, technical analyst at Commerzbank.
"The bias is to the upside ... it's a general picture. The southern European indexes, IBEX and FTSE MIB, had even strong pushes to the upside and are now also digesting them, but it's all trend-confirming to the upside."