* FTSEurofirst 300 up 0.6 pct, hits fresh 5-yr highs
* ArcelorMittal, BT, Generali results beat expectations
* Yen weakness seen hurting some exporters
By Toni Vorobyova
LONDON, May 10 European equities punched fresh
five-year highs on Friday, continuing to draw support from
central bank stimulus, and with steelmaker ArcelorMittal
and telecoms group BT jumping on strong
Investors were looking to a meeting of Group of Seven
finance chiefs for reaffirmation of policymakers' commitment to
economic stimulus - the key driver of equities' 11-month long
rally - and for clues on possible further measures from central
U.S. Federal Reserve Chairman Ben Bernanke is also expected
to leave the door open to further bond purchases in a speech at
1330 GMT, after conflicting comments about the effectiveness of
the bond-buying programme from some Fed officials this week.
The FTSEurofirst 300 index was up 0.6 percent at 1,236.48
points by 0742 GMT, testing levels not seen since June 2008
and getting a boost from fresh money as investors in
several European countries returned after a public holiday.
"The general direction is for further more accommodative
policy and that should drive equities further. We are adding to
positions selectively in Germany and Italy," said James
Butterfill, equity strategist at Coutts.
Underscoring investor optimism, Lipper data showed that
U.S.-based funds invested some $213 million of new money in
European equities in the week to May 8 - the strongest inflows
in nearly four months.
Germany's DAX - which this week became the first
major European index to follow in the footsteps of the U.S. S&P
500 in scaling record highs - added 0.7 percent to new
Italy's FTSE MIB rose 1.4 percent, supported by
forecast-beating results from insurer Generali, whose
shares were up 2.1 percent.
Strong earnings reports also boosted the world's largest
steel maker ArcelorMittal, which jumped 6 percent, and
telecoms group BT, which surged 8.7 percent.
The results lifted what has so far been a mixed
first-quarter earnings season in Europe, with 55 percent of the
STOXX Europe 600 that have already reported missing forecasts,
according to Thomson Reuters StarMine.
Industrials have been one of the worst performers, with a
miss rate of 64 percent, and analysts said the sector
could face fresh pressure from a depreciating yen, which
continued to weaken on Friday after breaking the psychologically
important level of 100 per dollar.
"The yen weakness is a headwind for German exporters as they
might lose competitiveness. We also see some margin pressure in
Germany with rising wages which could hurt these companies,"
said Emmanuel Cau, strategist at JP Morgan.