* FTSEurofirst 300 up 0.3 percent
* AXA and Allianz earnings bolster insurers
* Euro STOXX 50 in 'overbought' territory
By Tricia Wright
LONDON, Aug 2 Robust insurer earnings helped
drive European shares to a two-month high on Friday, while mixed
U.S. jobs data supported the view the Federal Reserve may be
more cautious about cutting back on its economic stimulus.
The STOXX Europe 600 Insurance index saw solid
gains, up 0.9 percent, with Europe's No. 2 insurer AXA
ahead 2.2 percent after forecast-beating results. Peer Allianz
, whose operating profit grew more strongly than
expected, rose 0.8 percent.
The FTSEurofirst 300 closed up 0.3 percent at
1,224.74 points, its highest close since May 30.
The key U.S. jobs report showed non-farm payrolls rose by
162,000 in July, below expectations, although the unemployment
That mixed data caused a period of index volatility after
the release, as investors considered what it may mean for the
timing and scope of any pullback in Fed stimulus, before it
ended close to its pre-data release level.
"I think the markets have not quite shrugged it off but they
really aren't that fazed by it... Maybe this means that we'll
get an extra couple of months of QE (quantitative easing),"
David Jones, chief market strategist at IG, said.
Company earnings dominated the market on Friday. Italy's top
phone group Telecom Italia fell 4.2 percent after
cutting its guidance on 2013 core profit and due to political
worries in Italy.
Italy's benchmark FTSE MIB index fell 0.2 percent
after a court ruling upholding a tax fraud conviction against
Silvio Berlusconi on Thursday raised questions about the ruling
The euro zone's blue-chip Euro STOXX 50 index -
up 13 percent since late June, its biggest rally in 2013 - has
hit 'overbought' territory, charts showed.
But technical analysts remained bullish on the index, which
on Friday firmed 0.1 percent to 2,811.00 points.
"The major caveat to the bull case at this stage is that the
index looks pretty overbought... That said, it would be
surprising if... 2,851 or so, were not tested before long,"
Charles Stanley analyst Bill McNamara, said.
While the current European earnings season has proved
lacklustre so far, analysts reckon the market is looking through
these figures, anticipating a pick up in quarters to come as
recent improving macroeconomic data filters through.
Of about 59 percent of STOXX Europe 600 firms to
have reported second-quarter results, 55 percent have met or
beaten market forecasts, Thomson Reuters StarMine showed.
"(Markets are) a little bit stretched, but looking forward
9-12 months then we've got scope to go quite a bit higher,
(based on) earnings prospects," said Ros Price, chief investment
strategist at Seven Investment Management, which has over 4
billion pounds ($6.1 billion) of assets under management.