European shares rose to a two-week closing high on Thursday, boosted by strong results from retailers, while a Reuters poll suggested stocks were set to rise further on corporate earnings strength. The pan-European FTSEurofirst 300 index of top shares closed up 1 percent at 1,123.52 points following early session falls on concerns about Portugal, after its parliament rejected planned austerity measures.
Trading volume was 104.8 percent of its 90-day average. Retailers were in demand, with the STOXX Europe 600 Retail rising 1.5 percent. Kingfisher jumped 7.2 percent after announcing forecast-beating full-year profits, while Next gained 4 percent following a dividend hike.
Volume was high for both companies, with Kingfisher's at 273.6 percent of its 90-day average and Next at 254 percent of its 90-day average.
The stocks both outperformed the FTSE 100 index which was up 1.5 percent.
A Reuters poll showed positive corporate earnings would help boost European stocks through 2011, with Germany's benchmark DAX index and France's CAC 40 seen closing this year around 11 percent and 13 percent higher, respectively.
On Thursday Germany's DAX gained 1.9 percent and France's CAC rose 1.4 percent.
In the carmaking sector, Daimler was in demand after a person familiar with the matter said the company and Rolls-Royce have submitted an offer of 24 euros per share for specialty-engine maker Tognum.
Daimler was up 3.5 percent.
Higher oil prices historically have a negative correlation with auto sector performance Barclays Capital analysts said, given the demand substitution effect.
Portugal's PSI 20 rose 1.1 percent and Spain's IBEX 35 gained 1.1 percent as investors shrugged aside a Moody's downgrade of 30 Spanish banks.