* FTSEurofirst 300 index rises 0.5 percent
* Euro STOXX 50 faces resistance at 2,555
* SABMiller up 5.1 pct on solid earnings
By Atul Prakash
LONDON, Nov 22 (Reuters) - European shares advanced for a fourth straight session to touch a two-week high on Thursday, with data from China that showed further signs of recovery in the world’s second-biggest economy encouraging demand.
The China HSBC Flash Manufacturing Purchasing Managers Index, which largely reflects the private manufacturing sector, hit a 13-month high of 50.4 in November. It followed figures on Wednesday showing U.S. manufacturing picked up at its quickest pace in five months in November.
But German business activity shrank for a seventh straight month in November, a similar survey showed, with the services sector contracting at its fastest rate in 3-1/2 years.
“There have been a lot of concerns regarding the outlook for global growth. In this context, any improvement in Chinese data is welcome, given that investors are still risk averse, which is reflected in valuations,” said Robert Parkes, equity strategist at HSBC Securities.
“It also highlights that there are risks in having a purely defensive portfolio at this point in time.”
According to Thomson Reuters Datastream, the broad STOXX 600 trades at 11 times its 12-month forward earnings, still well below a 10-year average of 12.3, against a price-to-earnings ratio of 12.1 for Wall Street’s S&P 500 .
Sectors more sensitive to economic growth were among the top gainers, with miners rising 1.1 percent, autos rising 0.9 percent and the travel and leisure sector climbing 0.7 percent.
At 0858 GMT, the FTSEurofirst 300 index was up 0.5 percent at 1,102.59 points after rising to 1,102.69, the highest since November 8. It has so far gained 3.3 percent this week, the best weekly performance since early February.
The euro zone’s blue chip Euro STOXX 50 index rose 0.6 percent to 2,534.03 points, with charts showing that the index had potential to advance further in the coming days.
Roelof-Jan van den Akker, senior technical analyst at ING Commercial Banking, said the index was still in a sideways environment and was likely to face resistance at around 2,555 - a falling trendline that started from its September highs.
“We could see somewhat higher prices in the next few days, but looking at a longer term weekly chart, it faces horizontal resistance at 2,610. As long as this level is not broken, we should expect a continuation of the sideways price action between 2,400 and 2,600.”
Some positive corporate news also helped in improving sentiment. SABMiller, the world’s second-biggest brewer, rose 5.1 percent after posting a 12 percent rise in first-half profit.