* Milan is Europe's top-performing bourse, up 1.5 pct
* Investors welcome likelihood of Renzi as new Italy PM
* FTSEurofirst 300 up 0.4 pct, ESTOXX 50 up 0.5 pct
* German, French economic growth also lifts equities
By Sudip Kar-Gupta
LONDON, Feb 14 Italy's stock exchange led
European shares higher on Friday as investors reacted positively
to Rome's new prime minister, while signs of economic growth in
Germany and France gave a further fillip.
The pan-European FTSEurofirst 300 index was up 0.4
percent at 1,330.22 points to mark its seventh rise in eight
sessions, while the euro zone's blue-chip Euro STOXX 50 index
advanced by 0.5 percent to 3,112.37 points.
Italy's FTSE MIB equity index was the region's
best-performing stock market as it rose 1.5 percent to bring its
gains since the start of 2014 to nearly 8 percent, outperforming
a 1 percent rise on the FTSEurofirst 300.
Italian bond yields also fell to near eight-year lows as
investors warmed to the prospect of centre-left leader Matteo
Renzi becoming the country's new prime minister.
Emanuel Arbib, head of London-based Integrated Asset
Management, said Renzi could bridge political divisions and
reduce taxes, which could help Italian companies.
"I think the FTSE MIB will be OK this year. In 2015-2016
taxes could come down and bureaucracy could come down and that
will be good for companies," said Arbib.
GROWTH IN FRANCE AND GERMANY
The German and French stock exchanges rose after data showed
better-than-expected economic growth in the euro zone's two
France's CAC equity index rose 0.4 percent while
Germany's DAX gained 0.5 percent to 9,642.79 points,
pushing the DAX back towards a record high of 9,794.05 points
reached in late January.
Andrew Arbuthnott, head of European large-cap equities at
Pioneer Investments, said signs of a gradual economic recovery
in Europe should benefit the region's banking sector.
"We believe the macro environment in Europe will continue to
improve and the banking sector is a natural beneficiary," he
German industrial conglomerate ThyssenKrupp rose
3.9 percent to feature among the top performers on the
FTSEurofirst 300 after it posted better-than-expected quarterly
According to Thomson Reuters data, out of the 122 companies
in the pan-European STOXX 600 index to have reported
fourth quarter earnings so far, 51 percent have reported
earnings above analyst expectations.
This is higher than the long-term average of 47 percent and
above the average over the past four quarters of 46 percent.
Some analysts have expressed disappointment over the
European corporate results so far, but Barclays' equity research
analyst Alex Stewart had a more positive assessment.
"Earnings have beaten by more than at any point since the
first quarter of 2012. But perhaps most importantly, the pace of
downgrades has slowed," he said.