* FTSEurofirst 300 up 0.8 pct, hits new 5-1/2-yr high
* Personal & household goods shares top gainers
* Watchmaker Swatch advances on positive outlook
By Atul Prakash
LONDON, Jan 10 European equities hit a new
5-1/2-year high on Friday, with personal goods boosted by an
update from watchmaker Swatch and peripheral euro zone stocks
adding to brisk gains made so far this year.
Swatch Group rose 4.6 percent after saying it
expected "dynamic growth" this year, easing concerns of a
downturn in export destination China.
The world's largest watchmaker, which owns luxury brands
such as Omega and Breguet, helped the STOXX Europe 600 Personal
& Household Goods index to gain 1.3 percent and hit the
top spot on the sectoral gainers' list.
"Consumer confidence in the European Union has risen
strongly in the past six months and the economic recovery will
bolster it further. The personal and household goods sector is
likely to profit the most from an expected rise in demand,"
Christian Stocker, strategist at UniCredit in Munich, said.
Other luxury goods companies also rode on the positive
momentum, with Richemont, the maker of Cartier
jewellery and IWC watches, up 3.6 percent, and British luxury
brand Burberry up 2.3 percent. Italy's Luxottica
, the world's top premium eye wear maker by sales and
owner of Ray-Ban and Oliver Peoples brands, gained 3.3 percent.
"Luxury goods will be in demand this year as an improving
economic outlook in developed markets is also good for emerging
markets," said Didier Duret, chief investment officer at
ABN-AMRO Private Banking, referring to the popularity of
European luxury goods in markets such as China, Japan and India.
Duret expects improving global economic conditions and
supportive central banks to keep driving the markets higher this
"Strong equities are reflecting the sweet spot the central
bankers are providing for the market. Investors believe that we
are way off higher interest rates and the European economy is on
a good footing."
At 1140 GMT, the FTSEurofirst 300 index of top
European shares was up 0.8 percent at 1,325.49 points, with
Spain's IBEX rising 0.9 percent, Italy's FTSE MIB
gaining 0.6 percent, Athens's ATG up 0.8 percent
and Lisbon's PSI 20 advancing 0.7 percent.
The peripheral equity indexes are up 4 to 12 percent this
year, helped by recent demand for Ireland's first bond sale
since it exited its EU/IMF bailout and on hopes Portugal will be
able to exit its bailout programme this year as planned.
The indexes have outperformed the FTSEurofirst, which is up
just 0.7 percent in 2014. The pan-European index set a new
5-1/2-year high on Friday, just a shade higher from Thursday's
peak since mid-2008, but investors stayed cautious before U.S.
jobs data later in the day that could erode gains.
According to a Reuters poll, non-farm payrolls rose by
196,000 jobs last month, but the survey was conducted before
Wednesday's data, which showed the private sector hired staff at
the fastest pace in 13 months in December.
Robust data could prompt the U.S. Federal Reserve to move
forward with plans to further wind down its quantitative easing
programme. A stimulus cut is seen as negative for shares as it
Among individual movers, Lufthansa rose 7.7
percent, with traders pointing to positive broker comments and a
company presentation forecasting a shrinking 2014 fuel bill.
Tullow Oil rose 4.9 percent after media speculation it
could be a bid target for Statoil.