European shares rise on prospect of U.S. debt deal, Accor leads

LONDON Fri Oct 11, 2013 3:20am EDT

LONDON Oct 11 (Reuters) - European shares rose on Friday, lifted by prospects of a deal to end the U.S. debt stalemate.

The pan-European FTSEurofirst 300 index gained 0.3 percent to 1,249.23 points in early trade, building on gains from the previous session when the index marked its biggest daily gain in a month with a 1.7 percent rise.

The euro zone's blue-chip Euro STOXX 50 index advanced 0.2 percent to 2,974.49 points.

French hotel group Accor topped the FTSEurofirst 300 leaderboard with a 2 percent rise after investment bank Citigroup's upgraded the stock to a "buy".

Global equities have lost ground this month since the U.S. government partially shut down due to the budget stalemate, leading to concerns about the $16.7 trillion U.S debt ceiling which Treasury Secretary Jack Lew said the government will hit no later than Oct. 17.

But President Barack Obama and Republican leaders appeared ready to end the deadlock after meeting at the White House on Thursday.

Darren Courtney-Cook, head of trading at Central Markets Investment Management, said even a short-term extension to the U.S. debt limit would be enough to soothe investors' nerves.

"Even if they just kick the can down the road again, the fact that there won't be a default is why the markets would take it so positively. There may be some volatility going up to the wire, but most people expect a year-end rally," he said.