Telecoms rally helps European shares hit fresh highs

Last Updated: Wed, Jan 09, 2013 16:40 hrs

LONDON, Jan 9 (Reuters) - Rallying telecom stocks and a bullish start to the new earnings season propelled Europe's top shares to fresh 22-month closing highs on Wednesday.

The STOXX Europe 600 telecoms index rose 2.7 percent, the top sectoral gainer, with traders citing a Financial Times report saying top telecommunication firms were discussing a pan-European infrastructure network to unite Europe's disjointed national markets as a reason for the rise.

The FTSEurofirst 300 provisionally closed up 7.76 points, or 0.7 percent, at 1,167.96, also lifted by a bullish start to the U.S. earnings season after aluminium giant Alcoa's in-line profits and above-consensus revenues.

Equities are being lifted by the apparent reduction in risk posed to the macro economy from the euro zone debt crisis and budget issues in the United States.

"It has been a good start to 2013 and equity investors have been buying into the idea that we have negotiated the worst case scenario," said William De Vijlder, chief investment officer for strategy & partners at BNP-Paribas Investment Partners.

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