UBS results help Europe stocks hit 7-week high

Mon Jul 22, 2013 12:43pm EDT

* FTSEurofirst 300 up 0.14 pct, Euro STOXX 50 up 0.34 pct

* UBS stock hits two-year high, sparks rally in banks

* Portuguese shares soar as president rules out election

By Blaise Robinson

PARIS, July 22 (Reuters) - European shares rose to seven-week highs on Monday, led by financials after upbeat quarterly results from UBS fuelled hopes for European bank earnings.

Shares in the Swiss lender gained 2.5 percent and hit a level not seen since early 2011, after it came out early with better-than-expected results.

Other banks also rallied, with BNP Paribas up 1.7 percent and UniCredit up 2.5 percent.

The FTSEurofirst 300 index of top European shares closed 0.14 percent higher at 1,210.70 points, after rising to as high as 1,213.24 points during the session, the index's highest level since early June.

"The spotlight is finally back on corporate results. Earnings have been relatively good so far, particularly from U.S. banks, and there's another 160 S&P 500 firms set to report this week," FXCM analyst Vincent Ganne said.

"The mood is very bullish. U.S. indexes are hitting record highs; we're not there yet in Europe but we've crossed big resistance levels."

Dutch conglomerate Philips also posted forecast-beating earnings, thanks to a strong performance in its healthcare division, sending its stock up 2.1 percent.

About 21 percent of S&P 500 companies have reported results so far in this earnings season, with 73 percent beating or meeting profit forecasts, according to Thomson Reuters StarMine.

In Europe, about 18 percent of the STOXX 600 companies have reported results so far, and just 51 percent of the firms have beaten or met forecasts, according to StarMine.

Around Europe, UK's FTSE 100 index dipped 0.1 percent, Germany's DAX index ended flat, and France's CAC 40 gained 0.4 percent.

The euro zone's blue-chip Euro STOXX 50 index added 0.3 percent at 2,725.40 points, extending its recent rally.

"European indexes are breaking above recent trading ranges, and all the resistance zones have been pierced," Aurel BGC chartist Gerard Sagnier said.

"The buying pressure is back, and it could be strong enough to propel indexes towards 2013 highs."

Portuguese stocks soared on Monday, with Banco Espirito Santo up 11 percent and Portugal Telecom up 2.8 percent, after the country's president ruled out a snap election and soothed investor concerns about the debt-stricken country's political stability.

Bucking the trend, Mobistar tumbled 31 percent after the Belgian telecoms operator slashed its revenue and profit forecasts and scrapped its dividend.