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European shares edge higher, consolidate near highs

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* FTSEurofirst 300 up 0.1 pct, Euro STOXX 50 flat * William Hill helps travel and leisure sector * Major stock indexes near "overbought" territory By Atul Prakash LONDON, Jan 29 (Reuters) - European shares edged up to hover near two-year highs on Tuesday, with strong earnings reports and a brightening economic outlook lifting sentiment, although technical factors could limit gains in the near term. The STOXX Europe 600 Travel and Leisure sector was among the top gainers, led by a 4.3 percent gain for William Hill, Britain's largest bookmaker, after it posted strong full-year results. The sector index rose 0.6 percent. At 0908 GMT, the FTSEurofirst 300 index was up 0.1 percent at 1,173.90 points after setting a 23-month high in the previous session. The euro zone's blue-chip Euro STOXX 50 index was flat at 2,744.98 points. "Its momentum is slowing a little bit after a good move, but the overall uptrend remains intact. The Euro STOXX 50 is likely to defend its current levels and might not move much in either direction in the very near term," Commerzbank technical analyst Petra von Kerssenbrock said. The index could face its next resistance at around 2,800 points, last tested in July 2011, she said, adding the medium-term target was 3,050-3,080 and support was seen at 2,700, the level where a consolidation started after a rally in January. The Euro STOXX 50 has surged 34 percent since a multi-month low in June last year, while the FTSEurofirst index has gained 24 percent on liquidity support from central banks, an improving global economic outlook and robust corporate earnings. Just 6 percent of companies on the STOXX Europe 600 index have so far reported fourth-quarter earnings, but 72 percent of them have met or beaten forecasts, according to Data from Thomson Reuters StarMine. Market research group GfK said on Tuesday German consumer morale rose for the first time in four months heading into February as a lull in the euro zone storm boosted optimism. "The markets are currently overbought after one of the longest winning streaks in years and we are due for a period of consolidation. This will probably not be too violent as there is a lot of money waiting at the sidelines," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets. "Overall conditions remain favourable for a continuation of the rally. Central banks will continue to inject money and the world economy seems to be turning up." The relative strength index (RSI) for the Euro STOXX 50 and the FTSEurofirst was at around 68. A level above 70 is considered as "overbought", which often results in a retreat for stock indexes. An RSI below 30 is seen as "oversold". Among other sharp movers, banks fell 0.5 percent. Royal Bank of Scotland, down 3.4 percent, led the sector after the Wall Street Journal reported, citing people briefed on the negotiations, that the bank was close to a 500 million pounds ($785.32 million) settlement with U.S. and British authorities over claims that some of its employees submitted false Libor rates..

http://www.globalpost.com/dispatch/news/thomson-reuters/130129/european-shares-edge-higher-consolidate-near-highs