LONDON: European shares steadied near 5-year highs on Monday, propped up by gains at planemaker EADS and hearing aid group Sonova, with investors banking on a broad market rally to the end of 2013.
The pan-European FTSEurofirst 300 index was flat at 1,297.62 points in early session trading, remaining close to a 5-year high of 1,316.42 points reached on Nov. 7.
The euro zone's blue-chip Euro STOXX 50 index slipped back by 0.2 percent to 3,050.36 points, but both the Euro STOXX 50 and FTSEurofirst 300 indexes remain up by around 16 and 15 percent respectively since the start of this year.
The European equity rally has run out of steam over the last fortnight, but traders said investors were looking to buy equities on days when the market dipped, which should ensure that a rally into the end of 2013 was on track.
"From any perspective, it's still buy on the dips, and I think that should continue into the year-end," said Darren Courtney-Cook, head of trading at Central Markets Investment Management. Airbus company EADS rose 3 percent after winning new deals at the Dubai Airshow over the weekend, while Swiss group Sonova jumped 5.6 percent higher after raising its full-year guidance.
The third-quarter earnings season from Europe's leading companies has been mixed so far.
According to Thomson Reuters StarMine data, 51 percent of companies have beaten or met market expectations with their results, while 49 percent have missed them.
Morgan Stanley's European equity strategists wrote in a note on Monday the European earnings season had been "in-line to modestly disappointing" but the equity markets have been supported by expectations of ongoing support from world central banks.
The European Central Bank (ECB) cut interest rates to a record low of 0.25 percent earlier in November, while the US Federal Reserve has indicated it will stick to an economic stimulus programme known as "quantitative easing" (QE) for the near future.
"There shouldn't be any aggressive selling because there's still QE support out there," said Berkeley Futures associate director Richard Griffiths.
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