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European shares hit three-month high led by miners, Sodexo

Published 19/11/2015, 08:58 pm
© Reuters.  European shares hit three-month high led by miners, Sodexo
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* FTSEurofirst 300 rises 1 pct

* Sodexo rallies after solid update, buyback

* Special dividend boosts Johnson Matthey

By Danilo Masoni

MILAN, Nov 19 (Reuters) - European shares rose to three-month highs on Thursday, helped by strong gains among miners, while French catering-to-vouchers group Sodexo EXHO.PA rallied after giving a solid update and launching a share buyback.

The market tracked overnight gains in Asia and the United States, where the mood was helped by indications from the Federal Reserve that the U.S. economy was strong enough to cope with a rate hike.

"Sentiment is positive thanks to signs of solid economic growth with the U.S. economy nearing full employment. In Europe and Japan, central banks are carrying on with easy monetary policy to support growth and this plays in favour of stock markets," said Alessandro Allegri, CEO of Italy's Ambrosetti Asset Management.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.9 percent after falling 0.2 percent on Wednesday, while the euro zone's blue-chip Euro STOXX 50 index .STOXX50E rose 1 percent.

Sodexo was up 9.5 percent, its best one day gain since Oct. 2008, after saying it would cut costs further to cope with a volatile global economy and forecast higher revenues and operating profit for the fiscal year 2015-16.

Analysts said the results were stronger than expected, with Societe Generale (PA:SOGN) also welcoming news of a 300 million euros share buyback.

Johnson Matthey JMAT.L rose 7.6 percent after the world's biggest maker of metal catalysts for car emission control announced a special dividend.

Mining stocks .SXPP were the top sectoral gainer, up 2.1 percent, with BHP Billiton BLT.L leading after saying its priority was to maintain a healthy balance sheet.

The sector was helped as, with a December rate rise by the Federal Reserve increasing factored in by market players, the dollar backed off highs. A cheaper dollar makes dollar-priced metals cheaper for non-U.S. investors.

Thyssenkrupp TKAG.DE rose 2.4 percent, reversing initial losses after mixed results and a cautious outlook for the year. Brokers said the dividend was less than expected but quarterly adjusted operating profit beat expectations.

The impact of heightened security jitters following Friday's attacks in Paris looked to be easing as travel and leisure stocks .SXTP rose 1.4 percent after falling on Wednesday.

Ambrosetti's Allegri said he expected across-the-board gains for European shares in the coming weeks but some profit taking could kick in towards the end of the year. He said undervalued energy plays, which rose 0.9 percent, could represent a buying opportunitiy but risks remained due to low oil prices.

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