* FTSEurofirst 300 steadies near 5-year highs
* DAX touches new record high, IBEX around 2-year high
* Gains at SAP and Philips add most points to FTSEurofirst
By Sudip Kar-Gupta
LONDON, Oct 21 Gains at Philips and SAP
after reassuring earnings updates kept European shares
near five-year highs on Monday.
While some traders felt European equity markets could ease
back in the next two to three weeks as investors look to cash in
on the recent advance, the majority were forecasting a broad
rally into the end of 2013.
The pan-European FTSEurofirst 300 index edged up by
0.2 percent to 1,280.74 points in late session trade to hit
fresh 5-year highs, while the euro zone's blue-chip Euro STOXX
50 index was flat at 3,032.74 points.
Germany's DAX hit a fresh record high of 8,867.06
points before edging back to trade flat. Spain's IBEX
breached the 10,000 point level for the second straight session,
rising 0.5 percent to its highest level in more than 2 years.
Business software company SAP and consumer appliances group
Philips added the most points to the FTSEurofirst 300 index.
Philips rose 6.2 percent after reporting a near-tripling in
third quarter net profit, while SAP gained 5.3 percent after it
maintained its full-year outlook in spite of foreign exchange
Although the European third-quarter results season is less
than a tenth of the way through, the early numbers have been
fairly positive, with earnings on average 3.3 percent above
forecasts, in contrast to a broadly in-line performance in the
United States, according to Thomson Reuters StarMine data.
"Expectations weren't that great but as long as companies
are hitting their rough target, the market will take it well,"
said Toby Campbell-Gray, head of trading at Tavira Securities.
DELAYED U.S. DATA
Equity markets touched new record highs last week after a
last-minute U.S. fiscal deal averted the immediate risk of a
U.S. sovereign default and ended the U.S. government's partial
The U.S. government's partial shutdown had delayed the
publication of economic data from the country. The delayed data
is due to come out this week and some traders were reluctant to
put on big bets ahead of their publication.
"I think a pullback is due. We've moved up a lot but it's
stalling up here. Over the next few days there could be some
profit-taking and a bit of a correction," said Darren
Courtney-Cook, head of trading at Central Markets Investment
Courtney-Cook said any pullback over the next 2-3 weeks
could push the DAX back down to the 8,600 point level and the
Euro STOXX 50 down to 2,900 points, but he advocated using any
dips in the market to buy up equity positions.
Investors with a longer-term outlook also expected equity
markets to rally further.
"If you look at equities versus the alternatives it's still
a good long term bet and people are buying into the strength,"
said Pieter Fourie, head of global equities at Sanlam Private
Investments, whose top picks include luxury goods group LVMH