European stocks rise to three-week closing high

European stocks closed higher yesterday, as upbeat earnings news from companies such as luxury goods provider Richemont more than outweighed weaker-than-expected US consumer sentiment data.

The FTSEurofirst 300 index of top European shares rose 0.4 per cent to 1,019.41 points, its highest close since October 21, and just 0.7 per cent short of a 13-month closing high.

Over the week, the index rose 2.7 per cent and is up more than 57 per cent from the all-time low of March 9, as investors have seen several major economies emerge from recession. But the market had to contend with some downbeat macro data yesterday.

Across Europe, Britain's FTSE 100 closed 0.4 per cent higher, Germany's DAX rose 0.4 per cent and France's CAC-40 fell 0.1 per cent.

Richemont, which posted forecast-beating results, indicating the watch industry could be set for recovery, surged 5.6 per cent. Swatch Group, which also makes watches, rose 2.7 per cent.

Italian jeweller Bulgari added five per cent after saying it returned to a net profit in the third quarter.

US consumer sentiment fell in early November to the weakest in three months amid grim expectations for job and income prospects, according to the Reuters/ University of Michigan Surveys of Consumers, which said its preliminary index of sentiment for November fell to 66.0, the lowest since August, from 70.6 last month.

"I thought the market would respond more negatively to the US consumer data," said Heino Ruland, strategist at Ruland Research, in Frankfurt.

"It goes to show that people are convinced that the Federal Reserve will continue with accommodative, if not expansionary, monetary policy. Sometimes Asian markets react more to this sort of data the following Monday, as they rely more on the US consumer."

Corporate news helped to boost stocks.

Wall Street was higher around the time European bourses were closing. Companies' results boosted sentiment including those at Walt Disney, which rose 4.4 per cent, after its cable business helped to offset weakness in its film studio.

The Dow Jones, S&P 500 and Nasdaq Composite were up between 0.5 and 0.7 per cent. Index heavyweight HSBC rose 1.2 per cent on hopes Europe's biggest bank would pay a higher-than-expected dividend, traders said.

But Natixis tumbled 4.8 per cent after the French investment bank's quarterly profit missed forecasts.

Most energy companies closed higher. Yesterday morning, crude futures sank below $76 a barrel, their lowest in a month, but recovered to more than $76.55 later.

Total, BP and BG rose between 0.5 and 2.1 per cent.

Europe's economic recovery gained traction when Germany and France reported further growth in the third quarter yesterday and Italy's economy started to grow too, lifting the eurozone and wider European Union out of recession.