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LONDON, Jan 21 AFP

January 22 2013, 04:52AM

European share prices have risen, with London hitting a near five-year high in light trading amid a public holiday in the United States, although the luxury goods sector was tarnished by a gloomy outlook from the Swiss group Richemont.

London's FTSE 100 index of top companies gained 0.43 per cent on Monday to 6,180.98 points, a level unseen since May 2008.

Frankfurt's DAX 30 rose 0.61 per cent to 7,748.86 points, and Paris's CAC 40 added 0.57 per cent to 3,763.03 points, with dealers pointing to hopes for an agreement on the US debt ceiling.

In foreign exchange deals, the European single currency was stable at $US1.3317, while on the London Bullion Market, gold prices edged lower to $US1,687.50 an ounce from $US1,688.50.

Wall Street was closed for Martin Luther King Day, and as US President Barack Obama took the oath of office to start his second four-year term in Washington.

"Despite fairly low volumes due to a US holiday, Europe's markets have continued to edge higher, with the FTSE 100 hitting a new five-year high, helped by the absence of any meaningful economic or other data-related news flow," said Michael Hewson, Senior Market Analyst at CMC Markets UK.

He said investors appeared to be sitting on the sidelines ahead of economic data due out later this week and a slew of company earnings reports, including those from Google, Apple and Microsoft.

Europe's luxury goods sector slid after Richemont - owner of brands such as Cartier jewellery and Montblanc pens - said in an update that it was "unclear" how business patterns would develop in the near future, particularly in Asia, which has driven growth in the sector in recent years.

In reaction, shares in the French luxury goods groups LVMH and PPR slid by 1.03 per cent and 0.26 per cent in Paris, to stand at 140 euros and 155.25 euros, respectively.

In London, luxury accessories and handbag maker Burberry shed 1.37 per cent to 1,367 pence.

Shares in British publisher Pearson dived 2.91 per cent to 1,202 pence after it announced that profits would remain flat, ahead of next month's annual results statement.

"Traders will also keep an eye out on headlines from Brussels are euro-area finance ministers meet with the discussion mostly likely to centre the recent bailout of Cyprus," said ETX Capital analyst Ishaq Siddiqi.

In Paris, shares in airline Air France-KLM surged by 3.99 per cent to 8.418 euros on a recommendation from brokers at Credit Suisse, while shares in Carrefour supermarkets leapt by 2.57 per cent to 20.74 euros, also on a note from Credit Suisse.

In a sign that investors are starting to search for returns instead of a safe haven, a French auction of short-term debt didn't feature negative rates of return for the first time since July.

Asian markets were mixed on Monday, with Tokyo's Nikkei hit by a stronger yen and profit-taking after last week's rally, while dealers await the outcome of a policy meeting at the Bank of Japan.

Tokyo's Nikkei, which hit a 33-month high on Friday, fell 1.52 per cent. Sydney closed up 0.13 per cent, while Seoul ended flat and Hong Kong was also barely changed.

Chinese shares, meanwhile, rose 0.48 per cent, extending Friday's gains after Beijing released data showing the economy grew faster than expected last year.