* FTSEurofirst 300 up 0.7 percent
* Banks, autos lead market higher
* Kabel Deutschland slips on cautious outlook
By Tricia Wright
LONDON, Oct 10 (Reuters) - European shares rebounded on Thursday on signs of progress in Washington on ending the U.S. fiscal stalemate and averting a possible debt default.
U.S. Republicans were looking into a short-term hike in the government’s borrowing authority to buy time for talks on broader policy issues, a Republican leadership aide said on Wednesday.
House Republican leaders will visit the White House on Thursday as the search a way through the impasse intensifies. U.S. President Barack Obama has said he would accept a short-term ceiling increase as long as no strings were attached.
“There’s cautious optimism that... we could in the coming days and weeks actually come to some agreement and avert an imminent default,” Michael Hewson, senior market analyst at CMC Markets, said.
“But until we actually get a clear idea of where these talks are going to go, then the stock market’s going to remain capped.”
The FTSEurofirst 300 was up 0.7 percent at 1,233.18 points by 0733 GMT, around 3 percent below a five-year high hit in September.
Banks and autos were up 1.3 percent and 1.2 percent respectively as a renewed appetite for risk prompted investors to buy into cyclical shares.
Optimism over a possible U.S. breakthrough outweighed concerns about corporate earnings, with cable firm Kabel Deutschland becoming one of the latest European firms to issue a cautious outlook following medical technology group Getinge’s profit warning earlier in the week.
Kabel Deutschland shed 0.5 percent after it trimmed its revenue forecast for the current fiscal year and said the pending takeover of the company by Britain’s Vodafone would hit full-year net income.
“I think this is just the beginning of the tempering of expectations for the full-year because the first half wasn’t good enough and the second half growth isn’t coming through nearly as fast as people hoped for,” BTIG strategist Nick Xanders said.
Profit warnings have impacted stocks this month and analysts have cut 2013 earnings estimates for the pan-European STOXX 600 index by 3 percent since the start of the third quarter. ()