European shares hit highest close

European shares advanced to their highest close in more than eight months yesterday, as US data pointed to economic recovery and investors took the view that the current earnings season will continue to be mostly positive.

The FTSEurofirst 300 index of top European shares rose 0.5 per cent to 911.58 points, the highest close since November 10, and the 10th session of gains in the last 11. Energy shares rose as crude prices hovered just above $68 a barrel, almost double the level of February, reflecting greater economic confidence.

Index heavyweight BP closed 1.6 per cent higher, ahead of second-quarter results today. ENI, Royal Dutch Shell and StatoilHydro gained between 1 and 2.1 per cent.

The pan-European benchmark which slumped 45 per cent in 2008 due to the worst financial crisis since the Great Depression of the 1930s, is up 41.2 per cent from its lifetime low of March 9. Sales of new single-family homes in the US rose more than expected in June, while the inventory of homes for sale fell to a more than 11-year low, government data showed.

Across Europe, Britain's FTSE 100 and France's CAC-40 both rose 0.2 per cent. Germany's DAX rose 0.4 per cent. Wall Street was slightly lower as European bourses were closing. The Dow Jones, S&P 500 and Nasdaq Composite were down between 0.2 and 0.4 per cent.

Sales rose to an annual rate of 384,000 in June, the Commerce Department reported, up 11 per cent from May, while the number of new homes for sale fell to 281,000, the lowest since February 1998.