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Europe: Shares edge higher, Britain's FTSE hits new peak

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[LONDON] European shares hovered near recent highs on Thursday, with Britain's top equity index hitting a new peak following a rally in housebuilders and miners.

The pan-European Stoxx 600 index, which climbed to a one-year high earlier this week, was up 0.1 per cent at the close, while Britain's blue-chip FTSE 100 was also up 0.1 per cent after reaching an all-time high of 7,211.96 points.

Persimmon rose 7.2 per cent after Britain's second-biggest housebuilder by volume said sales had risen 15 per cent since Britons voted in June to leave the European Union. It posted an 8 per cent rise in 2016 revenue and said profits for the year would be at the top end of expectations.

"With solid increases in average selling prices and legal completions, Persimmon's growth continues despite the uncertainty around the UK's impending exit from the EU," said George Salmon, analyst at Hargreaves Lansdown.

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"With a healthy balance sheet, demand outstripping supply and no sign of borrowing costs rising in the foreseeable future, Persimmon looks in a strong position." Other property-related stocks also rose, with Taylor Wimpey up 5 per cent.

The market was also supported by miners. Precious metals miners Fresnillo, Randgold Resources and Centamin were 4.5 to 6.4 per cent higher after gold touched its highest in four weeks on a weaker US dollar.

Newly merged Italian bank Banco BPM advanced nearly 4 per cent, outperforming a 0.7 per cent increase in Italy's banking index and bringing total gains since the stock first started trading to more than 20 per cent.

Shares in Banco BPM debuted on Jan 2 and around 7 per cent of the new bank's capital changed hands this week amid growing demand for riskier assets and indications from analysts the lender may beat targets set under its business plan.

European insurers came under pressure following a note from JP Morgan.

The European insurance index fell 0.8 per cent, pressured by Hannover Rueck, which fell 2.9 per cent after JP Morgan cut its price target for the stock and RSA Insurance, which fell as much as 2.2 per cent after the investment bank downgraded it to "neutral" from "overweight".

"RSA was one of the best performing stocks in the Insurance sector in 2016... Since it has now reached our 585p target price, we move to Neutral. Our EPS estimates are essentially unchanged," JP Morgan analysts said in a note.

The worst performer across the benchmark Stoxx 600 index was Finnish oil refiner Neste Oyj, which dropped 5.6 per cent after a bearish note from Morgan Stanley.