* FTSEurofirst 300 index gains 0.4 percent
* Miners surge as risk appetite improves
* Smith & Nephew jumps after strong results
* Peripheral economy worries hit banks
By Joanne Frearson
LONDON, Nov 5 (Reuters) - European shares hit their highest
close in more than six months on Friday as better than expected
U.S. jobs data boosted hopes that the world's biggest economy is
recovering, with miners among the best performers.
The pan-European FTSEurofirst 300 <> index of top
shares provisionally closed 0.4 percent higher at 1,111.28
points - its highest level since mid-April and closed 2.3
percent higher for the week.
"A good end to the week, what we had been waiting for with
the U.S. Federal Reserve decision (to boost the money supply)
and the U.S. jobs data," Giuseppe-Guido Amato, strategist at
Lang & Schwarz in Frankfurt, said.
"Quarter-three numbers have also been inline or above
expectations. We are positioning on the long-side."
U.S. non-farm payrolls rose a solid 151,000 in October, the
first gain since May, a government report showed on Friday.
Private hiring rose by 159,000, while the government cut 8,000
jobs. []
Miners tracked metal prices <MCU3> higher as demand for
riskier asset classes grew after the U.S. jobs data. Vedanta
Resources <VED.L>, Antofagasta <ANTO.L> and Eurasian Natural
Resources <ENRC.L> rose 2.5 to 5.9 percent.
According to Thomson Reuters StarMine data one-year forward
forecast earnings growth for the STOXX Europe 600 basic
materials sector index <.SXPP> is one of the highest at 41.8
percent, which compares with the overall STOXX Europe 600
<> index at 18 percent.
Strong corporate results helped give drugmakers a boost.
Smith & Nephew <SN.L>, rose 5.2 percent after Europe's largest
maker of replacement knees and hips reported forecast beating
third-quarter results. []
GlaxoSmithKline <GSK.L> gained 2.8 percent as worries about
generic competition to its best-selling Advair lung drug eased,
following comments from Israeli-based drugmaker Teva <TEVA.O>.
BANKS, ROLLS-ROYCE HIT
On the downside, banking shares were weaker, with some euro
zone banks falling on renewed sovereign debt concerns. Bank of
Ireland <BKIR.L> <BKIR.I> was the worst hit, down 10.4 percent.
[] while the Thomson Reuters Peripheral Eurozone
Countries share index <.TRXFLDPIPU> was down 2.5 percent.
Royal Bank of Scotland <RBS.L> slipped 4.5 percent after it
said it expected challenging market conditions in the fourth
quarter. []
Aero-engines maker Rolls-Royce <RR.L> also fell, down 4.9
percent after airline Qantas's chief executive Alan Joyce said a
faulty part or design issue may have caused the explosion in an
engine on a Qantas Airways <QAN.AX> Airbus A380 that forced an
emergency landing in Singapore. []
MARKET MOMENTUM
Looking ahead, some analysts said the Fed's further stimulus
measures had set the ground for the stock market to go higher in
the remaining months of the year.
"One has to feel a sense of reservation about what's going
on, but you can't ignore momentum, which just seems to be one
way at the moment," said Mike Lenhoff, chief strategist at
Brewin Dolphin.
"The bad news could be ignored in the short term. The view
is that here is a central bank that is prepared once again to
ensure that the economy does not relapse into recession."
The one-year forward price-to-earnings ratio on the STOXX
Europe 600 <> index currently stands at 10.7, below the
10-year average of 13.4 times, Thomson Reuters Datastream
showed.
Across Europe the FTSE 100 <> index was 0.2 percent
higher, Germany's DAX <> gained 0.3 percent and France's
CAC 40 <> was flat.
(Editing by Greg Mahlich)
