European shares gain on signs of progress in US budget impasse

LONDON Thu Oct 10, 2013 3:09am EDT

LONDON Oct 10 (Reuters) - European shares snapped a three-day losing streak and rebounded from one-month lows on Thursday, with appetite for equities improved by signs of progress to end the U.S. fiscal stalemate and avert a possible debt default.

U.S. Republicans were considering a short-term hike in the government's borrowing authority to buy time for talks on broader policy issues, a Republican leadership aide said on Wednesday.

House Republican leaders will visit the White House on Thursday as the search intensifies for a way to break the impasse. U.S. President Barack Obama has said he would accept a short-term ceiling increase as long as no strings were attached.

At 0702 GMT, the pan-European FTSEurofirst 300 index was up 0.4 percent at 1,230.01 points after closing 0.5 percent lower in the previous session, when it touched a one-month intra-day low. The index is up 8 percent so far this year.

A Reuters poll showed on Wednesday European shares were poised to add 4 percent to this year's strong rally, with Germany's top index on course for another record high as the economic outlook improves.

Givaudan fell more than 1 percent, one of the top losers on the FTSEurofirst 300 index, after the fragrance and flavour maker said sales fell unexpectedly in the third quarter, hit by a weaker U.S. dollar and sliding currencies in some key emerging markets.

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