LONDON, Dec 2 (Reuters) - European equities hit a two-week closing high on Thursday on reports the European Central Bank had bought euro zone bonds and as data showed pending sales of existing U.S. homes unexpectedly surged in October.
The FTSEurofirst 300 .FTEU3 index of top European shares provisionally finished 1.6 percent stronger at 1,106.39 points, the highest close since Nov. 18. The session witnessed a choppy trade, with the index moving in a broad range of 1,086.95-1,107.25.
The index turned negative after ECB president Jean-Claude Trichet disappointed investors by not announcing an aggressive bond-buying programme, but the market got support after traders said the ECB was buying bonds of Portugal and Ireland at a modestly higher rate than usual.
Several bond traders said the bond buying was in small amounts, though the aggregate was unclear.
Analysts stayed positive on the equity market’s outlook.
“We are pretty bullish on the market for the next 12 months, partly on the earnings surprise story and partly on a rerating story. I think that the fears surrounding peripheral debt issues will abate as we go through the course of the next year,” said Graham Bishop, equity strategist at RBS.
Shares in automobile and auto parts featured among the top gainers on data showing U.S. auto sales rose a stronger than expected 17 percent in November. Volkswagen (VOWG_p.DE), Porsche (PSHG_p.DE) and Renault (RENA.PA) rose 2 to 5.1 percent. (Reporting by Atul Prakash; editing by Simon Jessop)