Cyclicals push European shares towards recent highs

LONDON Tue May 28, 2013 3:13am EDT

LONDON May 28 (Reuters) - European shares rose on Tuesday, with investors in Britain catching up with the previous day's gains after returning from a long weekend, and with comments by a top European Central Bank official improving sentiment.

At 0706 GMT, the FTSEurofirst 300 index of top European shares was 0.8 percent higher at 1,239.54 points, while Britain's blue chip FTSE 100 index gained 1.1 percent on expectations that central banks would continue to stick with their stimulus measures for some more time.

The FTSEurofirst 300 climbed to a 5-1/2-year high of 1,258.09 last week.

"I expect the major markets to test resistance levels of last week as investors are still seeking higher highs and new record levels in the near term, whilst the central banks are continuing their quantitative easing operations," Tom Robertson, senior trader at Accendo Markets, said.

The European Central Bank's Executive Board member Joerg Asmussen said on Monday the bank will stick to its expansive monetary policy for as long as necessary.

Cyclical sectors were in demand, with travel and leisure shares rising 1.2 percent and banks rising 1.1 percent.

On the negative side, state-owned lender Bankia fell 10 percent despite a multi-billion-euro cash injection, as expectations of a quick recovery faded following tough business conditions and a challenging restructuring plan.

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