* FTSEurofirst 300 up 0.3 percent
* Auto gain after Peugeot says French car registrations rise
* Miners boosted by China PMI
* Airlines fall as Ryanair warns on profits
By David Brett
LONDON, Nov 4 European shares rose on Monday,
trading close to five-year highs on hopes of more
equity-friendly stimulus measures from the European Central Bank
as a mixed earnings season cranked up a gear.
The European Central Bank is expected to strike a more
dovish tone at its policy meeting on Thursday following a sharp
drop in euro zone inflation in October.
UBS and RBS are anticipating an interest rate cut but many
others expect the ECB to hold fire on concrete action until at
By 0724 GMT, the FTSEurofirst 300 was up 0.3
percent at 1,293.68, trading close to five-year highs.
Heading into the busiest week of the quarterly earnings
season, 67 percent of companies have so far missed sales
expectations and 53 percent have fallen short on profits,
according to Starmine data.
Autos performed strongly after Peugeot
said French car registrations rose in October, while airlines
fell on a profit warning from Ryanair.
Stewart Richardson, chief investment officer at RMG Wealth,
said equity markets were well bid at the moment and it might
take more than a rate cut to maintain momentum.
"With ECB policies being ineffective in generating robust
economic growth, we doubt that anything short of outright QE
will have a longer-lasting positive impact on European equities,
and we do not believe that QE is likely at the moment," he said.
Miners bounced 1 percent after China, the world's
biggest consumer of raw materials, revealed its services sector
expanded at the fastest pace in 13 months in October, offering
indications that the economy has stabilised.
The sector is down nearly 13 percent in 2013 on concerns
Volkswagen, which has increased its European
market share in recent years at the expense of Peugeot, gained
Airlines were the main drag after Europe's biggest airline,
Ryanair, said full-year profits will fall for the first time
five years. Its shares fell 10.2 percent.
British engineer Weir Group shed 5 percent after it
said full-year profit would miss expectations.
UBS said that if euro zone monetary policy stayed
accommodative, the euro might move lower, which would in turn
ease some of the pressure on European earnings.
Credit Suisse said it believed equity markets would be
significantly higher in 6 and 12 months' time.
It cited cheap relative valuations, excess liquidity,
cautious long-term positioning, rising inflation expectations
and accelerating growth.