European shares post best week in eight months

Fri Dec 20, 2013 12:38pm EST

* FTSEurofirst 300 up 0.5 percent
    * Posts biggest weekly gain since April
    * Carnival rallies as results prompt broker upgrades


    By Tricia Wright
    LONDON, Dec 20 (Reuters) - European shares rose on Friday,
recording their best week in eight months, with cruise ship
operator Carnival up on forecast-beating results and broad
sentiment boosted by greater clarity on U.S. monetary policy.
    The Federal Reserve this week said it would trim monthly
bond purchases by $10 billion, sugar-coating the reduced
stimulus with a signal that interest rates were likely to stay
ultra-low for longer than previously expected. 
    Although the taper came earlier than many had forecast,
markets had plenty of time to prepare for the move - first
flagged in May - and the Fed's decision removed the policy
uncertainty that had kept many investors on the sidelines.
    "Clearly it's still a very accommodative policy and will be
remaining so for some time by the look of it," said Kevin
Lilley, manager of the Old Mutual European Equity fund.
    Strong U.S. growth data on Friday bolstered investor
confidence that the world's biggest economy can withstand a
scaling back of stimulus.
    The FTSEurofirst 300 closed up 0.5 percent at
1,287.61 points. That takes its gains this week to 3.6 percent,
its biggest weekly rise since April.
    Carnival was one of the top gainers, up 3.3 percent
after several brokers upgraded the stock following
forecast-beating quarterly results the previous day.
    "We have been hoping that new CEO Arnold Donald could be a
change agent and it appears that CCL is making some positive
steps towards a business transformation. Additionally, following
a better-than-expected Q4 and 2014 guidance, now is the right
time to get onboard," analysts at Credit Suisse said in a note,
upgrading it to 'outperform' from 'neutral'. 
    Volumes on Carnival stood at nearly four times their 90-day
daily average, against 1-1/2 times on the FTSEurofirst 300. The
rally pushed Carnival shares to three-month highs, breaking well
above technical resistance at the 200-day moving average.
    The charts outlook also brightened for the broader market,
opening the door for more gains on the EuroSTOXX 50 index of
euro zone blue-chips, up 0.6 percent at 3,049.35 points.
. A rise of 4.4 percent this week has hoisted the
index back above its 50-day moving average, now at 3,026.
    "I think it could probably push a little higher in the near
term and it's quite possible that we could see a test of ...
3,098 (the high posted towards the end of last month)," Charles
Stanley analyst Bill McNamara said.
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