European shares post biggest one-day gain in 7 months

LONDON, April 23 Tue Apr 23, 2013 11:40am EDT

LONDON, April 23 (Reuters) - Europe's top share index recorded its biggest one-day gain in more than seven months on Tuesday, buoyed by strong earnings and as a downbeat German survey raised expectations of a rate cut by the European Central Bank (ECB).

The FTSEurofirst 300 provisionally finished 2.4 percent firmer at 1,182.49 points, the highest close since April 11 and the biggest daily rise since early August, also helped by technical buying after it breached key resistance levels.

Investors rushed to buy equities after a survey showed Germany's private sector shrank for the first time in five months in April, reinforcing the case for an interest rate cut by the region's central bank at a policy meeting on May 2.

"The business cycle indicators are still not recovering strongly and could be a signal that we are going to see some additional stimulus coming through from the ECB," Robert Parkes, equity strategist at HSBC Securities, said.

France's benchmark CAC-40 index rose 3.6 percent to emerge as an outperformer after a survey of purchasing managers produced a much less bleak reading for business activity.

British chip designer ARM Holdings surged 11.9 percent after beating profit forecasts.

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