* FTSEurofirst 300, DAX both up 0.2 pct
* Colruyt leads gainers after strong first half
* Accor disappoints investors banking on more cost cutting
By Toni Vorobyova
LONDON, Nov 27 European equities edged higher on
Wednesday, supported by a long-awaited coalition deal in Germany
and by a trickle of solid earnings from the likes Belgian
discount grocer Colruyt.
German conservatives and the centre-left Social Democrats
(SPD) finally agreed to a "grand coalition" after all-night
talks, paving the way for Chancellor Angela Merkel to form a
government by Christmas.
"Markets tend to take every sign of solace as a positive so
I wouldn't exclude that the markets react positively. But it's
not groundbreaking news because ... most of the details ... are
very much in line with what was expected," said Gerhard Schwarz,
head of equity strategy at Baader Bank.
"One could say it's fostering somewhat the consumer side
because we are getting a minimum wage ... Germany is getting a
more domestically-focused economy. It's not happening overnight
but this could be one element of appeal for equity investors."
The German DAX was up 0.2 percent at 9,311.29 points by 0828
GMT, closing in on a record high of 9,323.44 points hit earlier
The pan-European FTSEurofirst 300 gained 0.2 percent to
Volumes were likely to be light ahead of Thanksgiving
holiday in the United States on Thursday.
Colruyt led the gainers, up 5.8 percent after posting a
stronger than expected first half profit, although the Belgian
firm was cautious on outlook.
The budget grocer's strong performance highlighted the
precarious nature of the euro zone recovery. Many companies are
still reliant on restructuring and cost cuts for any earnings
growth as analyst forecast downgrades have outnumbered upgrades
for the past 2-1/2 years.
Shares in Accor dropped 4.7 percent after Europe's
largest hotel group said on Wednesday it would divide its hotel
business in two in a bid to improve performance rather than
unveiling accelerated cost cuts as some traders had expected.
"At this stage we have a lot of questions ... Before this
announcement investors were generally expecting a new cost
cutting plan and a faster transformation of the group," analysts
at Societe Generale said in a note.
"On the basis of what we know so far, our first thought is
that the market may be disappointed."