European share indexes scaled to 5-1/2 year highs yesterday, boosted by upbeat results from companies including UK retailer Marks & Spencer and Germany's Postbank, a strong European technology sector and rallying US markets.
However, shares in Munich Re, the world's second-biggest reinsurer, fell more than two per cent on disappointment that a plan to buy back up to €1 billion of its own stock and a new profit target were not more ambitious.
The FTSEurofirst 300 index of top European shares closed 0.4 per cent higher at 1,470.9 points, after inching to its highest intraday level since late May 2001.
Around Europe the FTSE 100 index gained 0.3 per cent, while the DAX rose 0.5 per cent to its highest since 2001 and the CAC 40 rose 0.7 per cent.
"The trend is clearly upwards, even though some earnings are not that good. I wouldn't be surprised, if the DAX breaks through the benchmark of 6,500 points sooner or later," said Frank Schallenberger, an analyst at German bank LBBW.
In the United States, a rally sent the Dow Jones industrial average to an all-time high of 12,192.63 points as the country awaited results from mid-term congressional elections.
Investors in Europe were set to keep a close eye on election results as the Democrats seemed within reach of sweeping Republicans out of power in Congress.
"What ever the result may be, it won't affect the trend of the markets, which is still pointing upwards," Mr Schallenberger said.
Retailers were among the top gainers, with Marks & Spencer adding more than six per cent and hitting a record high after the company, Britain's leading clothing retailer, hit the top end of analysts' profit expectations.
Technology was among the strongest sectors yesterday.
German software maker SAP said that reaching an operating margin of 30 per cent next year was desirable and reiterated it was on schedule with its timetable of new product releases. SAP rose 2.3 per cent and was top gainer in the Euro STOXX 50 index.
Postbank was top gainer in the German blue chip index DAX, as the company's third-quarter profit was lifted by higher lending and better margins earned on deposits, sending its shares up 4.6 per cent.
On the down side, Scottish & Newcastle, Britain's biggest brewer, fell 2.9 per cent, despite posting strong third-quarter results, because of a weak UK beer market and concern for next year.
The French telecoms and media group Vivendi, which owns the world's biggest record company Universal Music Group, reported below-forecast sales growth for the third quarter, sending its shares down 1.4 per cent.
Shares in DaimlerChrysler slipped almost one per cent as global sales of the Mercedes Car Group premium division fell 3.5 per cent last month, weighed down by plunging deliveries of Smart cars.