European markets strode towards a two-year high, led by miners, carmakers and building materials stocks as the region benefited from a raft of strong earnings figures.

The Eurofirst 300 index climbed 0.6 per cent to 1,117.24, closing at its highest point since September 2008. The index has gained 70 per cent since its March 2009 low and has risen by 7 per cent this year.

The mining sector saw some of the most substantial gains due to strengthening commodity prices. French mining group Eramet was up 1.9 per cent at €271.70 along with nearly all London-listed miners.

The building materials sector was lifted by earnings figures from CRH. The Irish materials company was up 4.4 per cent to €14.47 after posting better-than-expected third-quarter results.

Sector rival Lafarge was given a boost by the news, rising 3.3 per cent to €46.14, while in Germany Heidelberg Cement was up 2.6 per cent to €42.68. Spain’s Ferrovial improved 3.3 per cent to €8.13.

The carmaking sector gained as the Association of European Businesses predicted Russian car sales would expand 22 per cent in 2010. In France, Renault was up 4.3 per cent to €43.13 while Peugeot gained 3.9 per cent to €30.30. Frankfurt-listed BMW rose 2.8 per cent to €54.91 while Volkswagen climbed 2.4 per cent to €111.45.

In Germany, the Xetra Dax was up 0.6 per cent to 6,787.81 while France’s CAC 40 rose 0.8 per cent to 3,945.71. Paris-listed Hermès, the luxury goods company, jumped 7.6 per cent to €166.05 after lifting its full-year sales forecasts and saying that 2010 could be the company’s best year in a decade.

Stock in Hermès has been volatile in the past two weeks since rival LVMH bought a 17 per cent stake in the company.

The share price has regularly moved 5 per cent a day in either direction.

Portuguese banks were down as they launched an attack on Fitch Ratings for downgrading them. Banco BPI lost 0.3 per cent to €1.54 while Millennium BCP, one of the country’s biggest privately owned banks, was down 0.6 per cent to €0.63.

Zurich-listed Adecco, the world’s largest temporary employment group by revenues, was up 3.7 per cent to SFr60.75 after third-quarter profits beat expectations.

The earnings news was not all positive. Shares in Copenhagen-listed brewer Carlsberg were down 5 per cent to DKr565 after third-quarter results disappointed the market in spite of operating profits coming in above forecasts. Sector rival Heineken was down 1.8 per cent to €35.99.

Transocean, the world’s largest offshore drilling contractor and the owner of the Deepwater Horizon rig that exploded in the Gulf of Mexico, was up 2.2 per cent to SFr66. The company witnessed its second session of gains since the White House oil spill commission on Monday decided that the company had not cut corners on safety for their rig.

This lifted the sector, with Norway’s SeaDrill up 2.6 per cent to NKr196 and Paris-listed oil and gas engineering firm Technip up 0.4 per cent to €63.70.

Deutsche Börse, Europe’s largest stock exchange by market value, fell 1.1 per cent to €49.81 after Citigroup cut its rating on the stock from “buy” to “hold” and cut its price target from €60 to €55.

Strong earnings from London-listed Vodafone provided a boost to tech stocks across the region. Chipmaker STMicroelectronics was up 2.8 per cent to €6.67 while Dutch rival ASML gained 2.3 per cent to €24.61. Ericsson rose 0.8 per cent to SKr72.

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