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London - European shares climbed to a two-week high on Tuesday, with positive news from companies like BMW and Hexagon boosting sentiment ahead of the US Federal Reserve chair's testimony, which is likely to be dovish.
Measurement technology group Hexagon rose 4.7% to the top of pan-European FTSEurofirst 300 index after posting Q4 sales and operating profit in line with expectations, and saying its sales should grow at least 5% in 2014.
The European auto sector raced higher, with the sector index rising 1.4%. It was helped by a 1.7% rise in BMW after the luxury automaker said its January vehicle sales rose to a record high.
"The market is supported by some positive corporate news. Equities will further react positively if we get some more positive news on earnings, which has been disappointing," said Daniel McCormack, strategist with Macquarie.
He said the market was also likely to get some help from Janet Yellen when she testifies to lawmakers for the first time as head of the Federal Reserve.
"I suspect that she will talk in quite dovish manner, particularly given the very recent data flows which has been on the weaker side," McCormack said. "That will also probably support the market."
At 08:59 GMT, the FTSEurofirst 300 index of top European shares was up 0.6% at 1,309.24 points after climbing to its highest since late January in a fifth straight session of gains.
UK retailers were helped by a survey showing British retail sales rebounded last month after a weak December to record their strongest annual growth since April 2011.
Debenhams rose 2.6%, Kingfisher was up 2.4% and Home Retail added 3.6%.
Among sharp movers, L'Oreal gained 2.5% after saying its fourth quarter underlying sales growth improved more than expected. It also announced it would buy 8% of its capital for €6.5bn from Swiss consumer goods group Nestle, boosting the group's earnings per share by more than 5%.
Its shares later gave up gains after hitting an eight-month high.
