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Europe: Shares end higher, led by Carlsberg, Henkel

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[LONDON] European shares ended higher on Wednesday after well-received earnings reports from companies including Henkel and as Carlsberg's new management outlined restructuring plans, sending the brewing group's shares soaring.

The FTSEurofirst 300 rose 0.65 per cent, adding to a 0.2 per cent gain in the previous session. The index is down 0.3 per cent this week on fears of a possible interest rate rise by the US Federal Reserve in December after strong jobs data.

With European stocks near three-month highs, some said there was enough bullish sentiment to withstand a rise in rates. "If there's a one-off rate rise from the Fed, the market has enough appetite in it to take it in its stride," TJM Partners head of trading Manoj Ladwa said. "But going forwards, there's still loose monetary policy in place from the European Central Bank, and that's largely supportive of equities."

Denmark's Carlsberg rose as much as 9 per cent after it said it would book a US$1.4 billion impairment charge and cut staff. Analysts welcomed the steps, saying the brewer's earnings contained no negative surprises. Its shares ended up 6.2 per cent.

Henkel rose 6.7 per cent after the German consumer goods group posted a bigger-than-expected increase in third-quarter profit.

Supermarket group Ahold also rose, gaining 3.4 per cent after meeting net sales forecasts and reporting free cash flow that was ahead of last year's. Belgium's Delhaize got a boost from its merger partner's results.

However, Vivendi was down 5.8 per cent after the French media company reported lower third-quarter operating profit after the market close on Tuesday, as its music and pay-television units struggled with competition and subscriber losses.

It also posted weaker-than-expected profits.

Mediaset fell more than 9 per cent after the TV broadcaster, controlled by former Italian Prime Minister Silvio Berlusconi, raised its cost guidance and gave a cautious outlook for the fourth quarter.

Osram shares tumbled 28 per cent, its biggest one-day fall, after the German lighting group announced a 3 billion-euro growth plan following the disposal of its lamps business.

The earnings season has so far been mixed. With roughly four fifths of companies having reported, 50 per cent of them have missed expectations, according to Thomson Reuters Starmine data. "Analysts have low-balled expectations anyway ... so for earnings to come in weaker when expectations have already been lowered, it's a concern," TJM's Ladwa said.

JP Morgan Cazenove said the number of forecast-beating earnings in Europe undershot by 7 per cent, although once energy was stripped out, the euro zone recorded stronger earnings growth than the United States and Japan, up 6 per cent year-on-year.

REUTERS