By Danilo Masoni and Julien Ponthus
MILAN/LONDON (Reuters) - European shares rose to highs not seen since 2008 as growing confidence in corporate earnings and in the strength of the global economy continued to fuel a bull market, which shrugged off fears of a possible U.S. government shutdown.
The euro zone's STOXX <.STOXXE> benchmark index closed up 0.73 percent at 402.95 points, its highest level in 10 years and the pan-regional STOXX 600 <.STOXX> benchmark rose 0.5 percent to 400.71 points, a 2-1/2 year peak.
"In 2017 we were in a catch-up phase and now we are going beyond", said Philippe Waechter, chief economist at Natixis AM, commenting on the strength of euro zone shares.
"We are in a period of robust growth, markets are integrating this and because there are no signs of fragility, they have no reason to change directions", he added.
The European results season shifts into gear next week with equity valuations at their highest in more than a year and investors betting that the engine of earnings upgrades has plenty more fuel in the tank.
Strategists at Bank of America Merrill Lynch also said that the relentless rise in global stocks should extend in the short-term as investors pump record amounts of cash into equities.
Stocks were higher across all sectors at the exception of energy <.SXEP>, down 0.77 percent, tracking a fall in crude prices.
At the opposite, the European Personnal and Households goods index <.SXQP> jumped 1.5 percent with Adidas <ADSGn.DE> up 6.9 percent and France's SEB <SEBF.PA> on a 4 percent rise.
The basic resources index <.SXPP>, where big mining stocks are listed, rose 0.6 percent as metals prices were buoyed by the first acceleration in China's economic growth in seven years.
Among outstanding movers were shares in OC Oerlikon <OERL.S>, up 5.5 percent, after the Swiss-listed textile-and-surfacing solutions group forecast rising textile margins following two big Chinese orders.
"These contracts point to a stronger and more sustainable recovery of the investment cycle in the manmade/polyester industry especially in the key manmade market in China," Baader Helvea said in a note, affirming its buy rating.
Software AG <SOWGn.DE> rose 1.7 percent to its highest level in 18 years, supported by the prospect of a rise in 2018 earnings as a result of tax reforms in the United States.
Among British mid-caps, a profit warning sent crematorium operator Dignity <DTY.L> down about 50 percent.
Britain's biggest floor coverings retailer Carpetright <CPRC.L> also warned on profits, sending its shares plummeting 39.4 percent and weighing on home improvement retailer Kingfisher <KGF.L>, down 2.3 percent.
(Reporting by Danilo Masoni; Editing by Angus MacSwan)