* FTSEurofirst 300 up 0.4 percent
* U.S. moves closer to compromise over "fiscal cliff"
* European banks, miners rally as indexes approach fresh
By David Brett
LONDON, Dec 18 European shares rose towards 2012
highs on Tuesday, tracking overnight gains on Wall Street on
signs of progress over a compromise to halt austerity measures
that could damage the world's top economy's prospects.
By 0834 GMT, the FTSEurofirst 300 was up 4.71
points, or 0.4 percent at 1,137.2, nearing its peak for the
year, as was France's CAC, which was up 0.3 percent at
Germany's DAX hit its 2012 high, rising 0.5 percent
to 7,643.82 as investors favoured a market characterised by
defensive shares with exposure to emerging markets.
Across the Atlantic, the S&P 500 closed up 1.2 percent
after President Barack Obama made a counter-offer to
Republicans that included a change in position on tax hikes for
the wealthy, according to a source.
"Overnight news on the fiscal cliff has been taken
positively by the markets here in Europe after (they
underperformed) ...the U.S. recently," Securequity sales trader
Jawaid Afsar said.
He said that could drive further gains heading into the
holiday period, which could take Britain's FTSE 100 to
the long awaited 6,000 level area by the end of the year with
miners and financials in demand.
European Banks rose 0.5 percent, tracking their U.S.
Basic resources extended gains. Having
underperformed broader markets by up to 25 percent in 2012, the
sector has risen 10.8 percent in the last month on valuation
grounds and reassuring economic data from China.
Flows into European equity funds climbed to a three-month
high last week as U.S. investors beefed up their exposure to
Europe, according to EFPR data.
The renewed demand for European shares has been driven by
the data from China, a European Central Bank pledge made in
September to do what it takes to save the euro, and optimism
that a U.S. budget deal will be struck.
The market implied 5-year earnings per share compound annual
growth rate for U.S. companies is 3.3 percent, compared with a
2.2 percent contraction for developed European corporates,
according to Thomson Reuters Starmine data.