* FTSEurofirst 300 closes up 0.3 pct at 1,293.63 points
* Euro STOXX 50 ends up 0.3 pct at 3,061.18 points
* FTSEurofirst 300 at 5-year closing high
* Expectations of dovish ECB signals support equities
* HSBC rises after Q3 results
By Sudip Kar-Gupta
LONDON, Nov 4 (Reuters) - Expectations of monetary stimulus
from the European Central Bank (ECB), coupled with a rise in
HSBC, drove European shares to a 5-year high on Monday.
The pan-European FTSEurofirst 300 index closed up
by 0.3 percent at 1,293.63 points, its highest closing level
since mid-2008. The index had also earlier hit a 5-year intraday
high of 1,297.01 points.
The euro zone's blue-chip Euro STOXX 50 index
also advanced 0.3 percent, to 3,061.18 points, while Germany's
DAX - which hit a record high of 9,070.17 points last
week - also rose 0.3 percent to 9,037.23 points.
UK bank HSBC rose 2.3 percent to add the most points to the
FTSEurofirst 300 after posting a 10-percent rise in third
quarter profits and issuing a positive outlook.
European equities were also supported by expectations that
the ECB will take on an accommodative tone towards helping the
region's economy at its policy meeting on Thursday, after a drop
in euro zone inflation in October.
UBS and Royal Bank of Scotland are anticipating an interest
rate cut although many others expect the ECB to hold fire on
concrete action until at least December.
"An accommodative stance by the ECB is by now not only
expected by investors but also demanded politically. So, for a
while, the risk is for a break to the upside on equities," said
SteppenWolf Capital chief investment officer Phoebus
Moves by major central banks to lift the global economy
after the 2008 financial crisis have enabled stock markets to
keep rising, even in the face of weak corporate earnings.
Shares in Irish airline Ryanair slumped 12.6 percent
after it cut its earnings outlook.
According to Thomson Reuters StarMine data, 53 percent of
companies on the pan-European STOXX 600 index have
missed market expectations with their third quarter results.
Nevertheless, the FTSEurofirst 300 remains up by 14 percent
since the start of 2013 and SVM Asset Management fund manager
Margaret Lawson felt signs that the European economy was slowly
recovering would lift equities further.
On Monday, data from Markit showed that euro zone
manufacturing activity accelerated in October as new orders
increased for the fourth month in a row.
"The Continent has had its economic difficulties but with
ongoing austerity curbing wage inflation and major cost cutting
programs, many European companies are looking very competitive.
If we start to see any pick-up in economic activity, these
businesses are sitting on substantial operational leverage and
could see earnings rise very quickly," said Lawson.