European stocks in eight-day winning run

European stocks hit new five-year highs yesterday, ending stronger for the eighth day in a row, with companies boosted by takeover talk and the outlook for strong earnings growth.

Bank Lloyds advanced four per cent in heavy volume on persistent bid speculation. Traders said the stock was also supported by a broker upgrade.

Miners were boosted by robust base metal prices, with BHP Billiton, Anglo American and Rio Tinto all up between 1.8 and 2.8 per cent.

The pan-European FTSEurofirst 300 index was up 0.3 per cent at a new five-year closing high of 1,440.8, its highest point since June 2001. The index gained two per cent this week. The wider DJ Stoxx 600 rose 0.3 per cent yesterday.

Equity markets globally, including those in the US, Switzerland and Singapore, hit record highs this week, while some other markets struck multi-year highs, fuelled by a cocktail of strong earnings and economic growth.

"Companies globally have just had an amazing capacity to surprise with their earnings and it doesn't look as if the American economy is slowing down as people had expected," said Mike Lenhoff, chief strategist at Brewin Dolphin. "Don't forget, the US is not the only one now that's supporting global growth. It's also all of Asia and growth there is still very strong. And growth is improving in the euro zone and in the UK," he said.

Around Europe, London's FTSE 100 closed 0.6 per cent firmer at 6,157.3, its highest closing level since February 2001, boosted by gains in miners and oil shares.

Paris's CAC-40 ended down 0.15 per cent, hit by a 2.3 per cent fall in L'Oreal, which was hurt by a weak third-quarter performance in the US and Japan.

Frankfurt's DAX gained 0.2 per cent, while Zurich's SMI scored an intra-day record high, but ended down 0.3 per cent.

US stock markets were mixed by the close of European markets.

Earnings from technology and pharmaceutical firms dominate the results season in Europe next week, while markets will also closely watch US and UK inflation data.

"I'm still positive on earnings growth. The last two years, after companies have reported, earnings have been upgraded. I'm optimistic about the current reporting season," said Gartmore fund manager Roger Guy.

Oil shares ended up and boosted the FTSE index as crude oil prices rose 2.3 per cent to $59.2 a barrel.