* FTSEurofirst 300 index rises 0.4 percent
* Gains seen capped ahead of U.S. election
* Tech, travel shares among top gainers
By Atul Prakash
LONDON, Nov 6 (Reuters) - Stronger travel and tech stocks helped European equities to advance on Tuesday and charts signalled more gains, although uncertainty about the outcome of the U.S. election is likely to cap moves throughout the session.
Polls show that U.S. President Barack Obama and Republican challenger Mitt Romney will have a close fight in Tuesday’s election. The results could impact the outcome of “fiscal cliff” negotiations on spending cuts and tax increases.
The scheduled austerity move of up to $600 billion, which will come into force next year unless a deal is reached, has the potential to drag the world’s biggest economy back into recession.
“The market is in a wait-and-see mode ahead of the U.S. election,” Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, said.
“....I would not be too hasty in buying cyclical stocks, but will keep a close eye on some technology and financial shares.”
European technology shares, up 1.2 percent, were the top sectoral gainers, with ARM Holdings rising 5.5 percent in technical buying, with analysts saying that recent price moves created conditions for strong upside momentum.
Travel and leisure stocks advanced 0.9 percent, helped by a 1.6 percent rise in InterContinental Hotels, which is opening up talks on the sale of its New York Barclay hotel to a wider group of prospective buyers.
Tech and travel sectors helped the FTSEurofirst 300 index of top European shares to rise 0.4 percent to 1,113.05 points by 0915 GMT. It fell 0.6 percent in the previous session.
The euro zone’s blue chip Euro STOXX 50 index was up 0.6 percent at 2,532.35 points. The index hovered above its 50-day moving average of 2,512 and had a crucial support at around 2,465, representing a trendline that has been in place since August, charts showed.
“As long as prices are staying above the 50-day moving average line, the short-term upward bias remains intact. I am still looking for a break above the longer-term trendline on a weekly chart at 2,560 and a strong horizontal resistance at 2,610,” Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said.
He said a breach of those key levels would confirm a bullish trend for a further rally in the longer term towards 3,000.
Defensive shares broadly underperformed the wider market, with the food and beverages sector staying flat and utilities shares up only 0.2 percent.
E.ON, Germany’s largest utility, fell 1 percent after traders said Morgan Stanley had cut the group to “underweight” from “equal-weight”.
Among other individual movers, Hannover Re rose 6.8 percent after the company gave a bright outlook for 2012 and 2013 net profit following strong third-quarter results.