Buoyant earnings fuels European shares rebound
* FTSEurofirst 300 up 6.62 points at 1,298.20
* ING, Adecco rally after beating earnings forecasts
* EasyJet takes off on bullish passenger numbers
* Experian falls after results as BofA ML cuts rating
By David Brett
LONDON, Nov 6 (Reuters) - European shares rose on Wednesday, erasing the previous session's losses, after a batch of better-than-expected corporate results lifted sentiment.
The FTSEurofirst 300 was up 6.62 points, or 0.5 percent at 1,298.20. It was at five-year highs but within the 18 point range it has been in since mid-to-late October.
Investors welcomed forecast-beating results from Dutch banking and insurance group ING and Adecco, the world's No. 1 staffing agency, while cement major Lafarge confirmed debt reduction targets for this year and next.
ING, Adecco and Lafarge rose as much as 5.7 percent.
Budget airline easyJet rallied 2 percent after announcing a 5.4 percent rise in October passenger traffic, and infrastructure firm Alstom jumped 5.6 percent after allaying fears that the company would need to raise capital as it said its balance sheet was robust.
But concerns linger over the general outlook for earnings, which are still experiencing more downgrades than upgrades according to Datastream.
Half way into the European earnings season, 52 percent of STOXX Europe 600 companies have missed profit forecasts, and two thirds have missed revenue forecasts, according to data from Thomson Reuters StarMine. This is in sharp contrast with the second-quarter results season during which only 42 percent of companies missed profit forecasts.
That is leaving valuations on indexes at multi-year highs looking on the expensive side compared with earnings momentum - 12-month forward price-to-earnings on the STOXX 600 is around 13.6 times, well above its 10-year average.
"Markets are looking a bit toppy although it looks like the rally (the path of least resistance) will continue for now," Mark Ward, head of trading at Sanlam Securities, said.
European stocks have been rallying over the past four weeks, boosted in part by expectations that both euro zone and U.S. monetary policy will remain accommodative for some time.
Recent tame inflation figures have fuelled speculation about a possible interest rate cut by the European Central Bank when it meets on Thursday.
"A Eurozone rate cut should be enough to keep the markets happy for now although people will be looking for an excuse to take profits," Sanlam's Ward said.
British credit data provider Experian shed 7.6 percent, the top faller in Europe as BofA ML downgraded its rating on the company to "neutral", citing valuation concerns after Experian reported first-half results.
Unilever, the household goods firm which recently issued a profit warning, slipped 1.6 percent with traders citing Nomura's downgrade of the company to "neutral" as weighing on the shares. "We see minimal returns until FY2013 results," the broker said.
Vopak, the oil services firm, shed 1.6 percent after reporting a 5 percent fall in three-quarter EBITDA.
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