* FTSEurofirst 300 up 0.6 pct, Euro STOXX 50 up 0.5 pct
* Upbeat data boosts sentiment ahead of GDP readings
* E.ON rallies as Q2 results beat expectations
By Francesco Canepa
LONDON, Aug 13 European shares hit a 2-1/2 month
high on Tuesday as upbeat economic data reinforced expectations
the euro zone is finally crawling out of recession.
Rises in the ZEW German sentiment index and in euro zone
industrial production lifted investor sentiment and set a
positive backdrop for Wednesday's release of second-quarter euro
zone GDP data, expected to show the currency bloc has emerged
The data helped the FTSEurofirst 300 gain 0.6
percent to 1,236.99 points, within sight of its 2013 peak at
1,258.09. The euro zone's blue-chip Euro STOXX 50
ended up 0.5 percent at 2,841.61 points.
"Provided that the data continues to come in like we saw
(with) the ZEW and industrial production today ... that should
continue to build positivity into the market," John Bilton, head
of European investment strategy at Bank of America Merrill
"There is still some decent valuation support and ...
positioning support sits behind European equities just now."
A BofA-ML survey showed investors increased their allocation
to euro zone stocks to its highest in 5-1/2 years, but
positioning still lagged optimism about growth in the region,
which hit a nine-year high.
The STOXX Europe 600 has risen around 12 percent
since June, lifted by improving economic data and a European
Central Bank pledge to keep monetary policy accommodative.
The index is trading at 12.7 times its expected earnings for
the next 12 months, above its 10-year average and leading some
short-term investors to take a cautious view.
Stewart Richardson, a partner at RMG Wealth Management, said
improvements on the macro front were priced in and European
shares were unlikely to make much headway until data showed more
robust economic growth and credit creation.
"With the equity market at the top of their recent range and
everyone focusing on the slightly better-than-expected numbers,
there's nothing there for us," said Richardson, who helps manage
$95 million worth of assets.
Some forecast-beating corporate reports, especially from
domestically focused European companies such as utilities
, have also supported shares in the past month.
All utilities in the STOXX Europe 600 index have
met or beaten analyst estimates so far this earnings season,
making them the best-performing sector. In comparison, 45
percent of all companies in the index have missed consensus
German utility E.ON rose 2.2 percent on Tuesday
after reporting slightly better than forecast profits for the
Volume in the shares was nearly 60 percent higher than their
average for the past three months, standing out on a day when
FTSEurofirst 300 turnover was around 74 percent of its average.