* FTSEurofirst 300 up 0.5 pct, highest since 2008
* World Bank lifts growth outlook for 1st time in 3 years
* Burberry surges after good retail sales
By Alistair Smout
LONDON, Jan 15 European shares rose on Wednesday
to fresh 5-1/2 year highs, led by stocks sensitive to the global
economic outlook after the World Bank raised its growth forecast
for the first time in three years.
So-called "cyclical" stocks such as financials, energy and
consumer discretionary stocks combined to add 5 points to the
pan-European FTSEurofirst 300, accounting for the
majority of the index's advance to 1,332.96 points - a gain of
The index rose to levels not seen since the middle of 2008,
and Germany's DAX hit new all-time highs.
The gains came after the World Bank said the global economy
had come to a "turning point," with fiscal austerity and policy
uncertainty no longer weighing as heavily on most richer
economies. It predicted total global growth of 3.2 percent in
Concerns over growth, especially in the United States, had
dragged on equities following a sharp miss in U.S. jobs data
late last week.
But stocks pared sharp losses on Tuesday, helped by signs of
life in the U.S. economy as forecast-beating December retail
sales data showed it gathering steam at the end of last year and
poised for stronger growth in 2014.
"We've had a bit of consolidation, but after Wall Street's
rally yesterday, and with global growth looking alright, the
outlook for equities looks quite good," said Zeg Choudhry, head
of trading at Northland Capital.
"The focus will be on earnings from now, and people expect
them to be OK as expectations are quite low."
Earnings fuelled Europe's top gainer. Burberry
posted a 14 percent rise in underlying retail revenue in the
Christmas quarter and saw its stock trade 6.5 percent higher.
The update was seen as boding well for the consumer
discretionary sector at large, after a festive trading period
which has proved mixed for high street retailers and
"It seems that those more expensive ticket items will still
be sold over what has been a mixed Christmas trading period ...
Luxury's advantage versus staples still holds," said Mike van
Dulken, head of research at Accendo Markets.
Banks were also firmer after the European Central Bank said
lenders will not be required in upcoming stress tests to adjust
sovereign debt portfolios they hold to maturity to reflect
current market values.