* FTSEurofirst 300 index rises 0.2 percent
* Focus on U.S. jobs as analysts upgrade estimates
* AXA and Allianz earnings lead insurers higher
By Atul Prakash
LONDON, Aug 2 European shares extended gains to
set a new two-month high on Friday, with investors betting that
U.S. jobs numbers will surprise on the positive side and signal
a further pickup in economic activity in the country.
The market also got a boost from some robust earnings
reports, which resulted in the insurance sector topping the
leaderboard. The STOXX Europe 600 Insurance index rose
0.9 percent, led by a 3.6 percent rise in AXA after
its results came in better than predicted.
AXA was the top gainer on the FTSEurofirst 300 index
, while Europe's biggest insurer Allianz
advanced 2 percent after its operating profit grew more strongly
than expected in the second quarter.
Analysts said that along with keeping a close eye on the
earnings season, the market's focus was on the U.S. jobs data,
which was scheduled to be released at 1230 GMT.
Some analysts upgraded their forecasts for the non-farm
payroll numbers to 200,000, from a consensus number of 184,000
for July after data showed on Thursday U.S. factory activity had
jumped to a two-year high last month and jobless claims hit a
5-1/2-year low last week.
Although encouraging numbers will raise chances of a cut in
U.S. stimulus sooner than expected, investors were starting to
look beyond the Federal Reserve's bond purchases and focusing on
long-term implications of a stronger economy, analysts said.
"The market has now come to grips with the fact that when
the tapering actually starts, the economy will be much stronger.
This optimism, together with a better earnings season, is
driving the market at the moment," Philippe Gijsels, head of
research at BNP Paribas Fortis Global Markets, said.
Gijsels expected the U.S. jobs numbers between 190,000 and
200,000. Deutsche Bank predicted a figure of more than 225,000,
adding that a number of other analyst estimates had been revised
to 190,000-210,000 in the last 24 hours.
Analysts said a positive data surprise would push the market
higher. The FTSEurofirst 300 was up 0.2 percent at 1,222.99
points at 0811 GMT after rising to 1,225.74, the highest in two
months, while the Euro STOXX 50 was flat at 2,808.46
"From a technical perspective the Euro STOXX 50 index has
been in a recovery in the form of a steep upward trend since the
end of June. We do expect that it will test its annual top at
2,851," said Thorsten Grisse, technical analyst at Commerzbank.
Most European indexes were up, but Italy's FTSE MIB
fell 0.5 percent on political uncertainty after a court ruling
upholding a tax fraud conviction against Silvio Berlusconi
raised questions about the ruling coalition's stability.