LONDON, Oct 15 (Reuters) - European shares were expected to hit a two-week high on Tuesday, mirroring gains on Wall Street and in Asia, on rising optimism that U.S. lawmakers would soon agree on a deal to re-open their government and avoid a possible debt default. U.S. Senate Majority Leader Harry Reid, a Democrat, and his Republican counterpart, Mitch McConnell, ended a day of talks on Monday, with Reid saying they had made "tremendous progress". "Optimism that a deal will soon be agreed continues to prevail. Relief that politicians have taken the U.S. to the edge and back again is clear," said Keith Bowman, equity analyst at Hargreaves Lansdown. "The move allows investors to again concentrate on fundamentals, including the now unfolding third quarter results season." The plan under discussion would end a partial government shutdown and raise the debt ceiling by enough to cover the nation's borrowing needs at least through mid-February 2014, according to a source familiar with the negotiations. "This is the first clear sign we've had that a deal may be close," Craig Erlam, analyst at Alpari, wrote in a note. "That said, based on the size of the gains seen in the stock market, what we're actually seeing is a case of cautious optimism. Investors are clearly still concerned that negotiations can collapse which would be disastrous, so close to the deadline." At 0626 GMT, futures for the Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were 0.4 to 0.7 percent higher. The FTSEurofirst 300 index of top European shares ended 0.1 percent higher in the previous session and a further rise on Tuesday would push the index to its highest level since early October. The index is up more than 10 percent this year. U.S. stocks closed 0.4 to 0.6 percent higher on Monday, while MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent on Tuesday. Investors will keep a close eye on the third-quarter earnings season for hints about the stock market's near term direction. Several major U.S. companies including Citigroup, Intel, Johnson & Johnson and Yahoo are scheduled to announce results. European earnings season will gather momentum in the last week of the month. On the macroeconomic front, focus will be on German ZEW economic sentiment indicator, seen at 49.6, at 0900 GMT, while ICSC/Goldman Sachs' U.S. chain store sales numbers for the week ended Oct. 12 are due at 1145 GMT. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0634 GMT LAST PCT CHG NET CHG S&P 500 1,710.14 0.41 % 6.94 NIKKEI 14,441.54 0.26 % 36.8 MSCI ASIA EX-JP 554.62 0.68 % 3.76 EUR/USD 1.3564 0.02 % 0.0003 USD/JPY 98.42 -0.14 % -0.1400 10-YR US TSY YLD 2.715 -- 0.03 10-YR BUND YLD 1.902 -- 0.04 SPOT GOLD $1,270.66 -0.17 % -$2.13 US CRUDE $102.19 -0.21 % -0.22 > Asian shares head to 5-mth highs on U.S. deal hopes > Wall St rises on hopes for a budget deal > Nikkei extends rise into 5th day on U.S. deal optimism > Dollar firm on hopes U.S. debt deal may be around corner > Gold in tight range amid U.S. budget talks, fund outflows > London copper slips; traders wait for U.S. fiscal deal news > Brent edges below $111 on hopes of US debt deal, ahead of Iran talks COMPANY NEWS RIO TINTO Global miner Rio Tinto boosted its forecast copper output for 2013 after a better-than-expected recovery from the U.S. Kennecott mine following a landslide, and posted record iron ore and coal output in the third quarter. TELEFONICA Spanish telecoms group Telefonica has started preparing the sale of its $3.6 billion stake in its listed Czech unit, three sector bankers closely following the process but not directly involved said on Monday. HENNES & MAURITZ Swedish budget fashion retailer Hennes & Mauritz said sales in its stores open at least a year fell 2 percent in September, in line with expectations. CASINO The company said sales growth accelerated in the third quarter thanks to robust demand in Brazil and an improvement at its Geant hypermarkets in France, where the retailer started to benefit from price cuts introduced at the end of last year. BURBERRY GROUP The company said its chief creative officer Christopher Bailey would become chief executive, following the departure of long-standing boss Angela Ahrendts to Apple. It said its retail revenue rose 17 percent to 694 million pounds ($1.11 billion) in the six months to Sept. 30 - bang in line with analysts' forecasts. MARINE HARVEST Norwegian fish farmer Marine Harvest's operating income surged to about 790 million Norwegian crowns ($132.23 million) in the third quarter of 2013 from 73 million in the year-ago quarter, lifted by strong salmon prices, the firm's preliminary accounts showed. ROYAL DUTCH SHELL Royal Dutch Shell CEO Peter Voser said it will take a longer time than expected for the company to reap benefits from its shale gas projects due to poor short-term results. DANONE French food maker Danone said it will appoint new management at its Dumex infant milk powder operation in China and has suspended a nutrition programme for mothers in the wake of a bribery scandal at Chinese hospitals. SCHINDLER The company said net profit fell to 368 million Swiss francs during the first nine months of the year due to an extraordinary impairment of 155 million francs and revised downwards its net profit expectations for the full year. KUEHNE + NAGEL The company's net profit rose to 442 million Swiss francs during the first nine months of the year.