* FTSEurofirst 300 up 0.4 percent
* Miners buoyed by U.S. data, China growth comments
* Euro STOXX 50 volatility index at near 6-year closing low
By Tricia Wright
LONDON, Jan 29 (Reuters) - European equities scaled fresh
two-year highs on Tuesday, boosted by miners, as optimism about
economic recovery gained momentum after robust U.S. home price
data and comments over growth in top metals consumer China.
A report earlier showed U.S. home prices rose in November,
adding further evidence of a housing market recovery there.
China's top think tank, meanwhile, lifted its economic growth
forecast for 2013 to 8.4 percent from 8.2 percent, with faster
expansion seen in the first half of the year.
The FTSEurofirst 300 ended up 0.4 percent at
1,177.79, its highest close since Feb. 18, 2011, taking the
rally off its June lows to around 24 percent. Mining stocks
ended the day up 1.8 percent.
Fund managers and strategists said that while there was the
possibility that equities would level off after such hefty
gains, they deemed a significant near-term sell-off as unlikely.
"You will get to the point where that squeeze higher will
have absorbed all of the cash that was destined to go into
equities and it's at that point markets will be vulnerable - but
I don't think we're there yet," said Andrew Cole, a fund manager
at Baring Asset Management, which has 32.4 billion pounds ($51
billion) of assets under management.
The Euro STOXX 50 Volatility Index, or VSTOXX,
Europe's widely-used measure of stock market risk aversion, hit
a near six year closing low on Tuesday, in a strong signal of
improving demand for equities.
The VSTOXX, which is based on put and call options on Euro
STOXX 50 stocks, fell 2.3 percent to 14.86, its
lowest close since early 2007, before the start of the U.S.
subprime crisis that triggered the world's biggest economic
crisis since the Great Depression.
"After the recent rise we had in European equities it might
be time for some kind of consolidation or a pause, (but) we do
not expect a big correction... because fundamentals are still
supportive, Patrick Moonen, a senior strategist at ING, said.
The advance seen from the miners was spearheaded by a 3
percent rise from Anglo American as investors cheered
greater clarity on its troubled Minas Rio iron ore project in
European banks came under pressure, with Royal Bank
of Scotland off 6 percent after the Wall Street Journal
reported that the lender was nearing a $785 million settlement
with U.S. and UK authorities over claims some of its employees
submitted false Libor rates.
Trading volume in RBS was robust, at 257 percent of its
90-day daily average against the FTSEurofirst 300 on 96 percent
of its 90-day daily average.