European shares hit a fresh one-year high on Thursday, with analysts pointing to third-quarter earnings beating forecasts, though mobile phone giant Nokia (NOK1V.HE) bucked the trend. At 1041 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.5 percent at 1,021.65 points, having risen as far as 1,022.26, the highest since Oct. 7, 2008.

The index, which jumped 2.1 percent in the previous session, is up more than 58 percent from the lifetime low it hit in early March, as investors have become more confident of the prospects for economic recovery.

Strong earnings from companies including JPMorgan (JPM.N) helped the Dow Jones .DJI to surge through the 10,000 mark on Wednesday.

The market has hit a sweet spot in terms of bottom-up and top-down newsflow, said Georgina Taylor, equity strategist at Legal & General Investment Management.

Earnings numbers have been doing very well. Critically, we're seeing some surprises on the top line, which is what we really needed to sustain and support equities.

And the economic news has been generally OK, she added.

UK supermarket group J Sainsbury (SBRY.L) rose 8.2 percent, with traders citing renewed interest from the Qatari sovereign wealth fund. A Sainsbury spokeswoman declined to comment on the talk. [

The Qatari fund built up a stake -- currently around 26 percent according to Reuters data -- during a takeover offer, which they ditched in Nov 2007 due to the credit crisis.

Banks .SX7P, which have surged 177 percent since hitting a low in March, extended gains.

Index heavyweight Banco Santander (SAN.MC) was among the risers, up 1.7 percent and hitting a 12-month high after Nomura upped its target price to 12.3 euros, from 11.9, and BofA Merrill Lynch added the company to its Europe-1 list.

UniCredit (CRDI.MI) rose 0.5 percent after Deutsche Bank upgraded it to buy. Others to gain included Deutsche Bank (DBKGn.DE), Societe Generale (SOGN.PA) and BBVA (BBVA.MC), up between 0.3 and 2 percent.

Across Europe, Britain's FTSE 100 .FTSE was down 0.2 percent, Germany's DAX .GDAXI was flat and and France's CAC-40 .FCHI rose 0.1 percent.

NOKIA FALLS

But not all third-quarter earnings have been positive.

Nokia (NOK1V.HE) fell 6.8 percent after the world's top cellphone maker reported a surprise loss for the July-September quarter, hit by a major writedown at its networks unit, though it said demand for handsets had improved.[ID:nLF596616]

Investors awaited more earnings results later in the day from companies including Goldman Sachs (GS.N), Citigroup (C.N), Google (GOOG.O), and IBM (IBM.N).

Beverage shares were in demand, with Diageo (DGE.L) and Pernod Ricard (PERP.PA), both fallers on Wednesday, rising 2.1 and 2.1 percent respectively. Anheuser-Busch InBev (ABI.BR) gained 0.5 percent. The world's largest brewer agreed to sell breweries in nine eastern European countries to CVC Capital Partners for an initial $2.23 billion, passing its target for divestments since its merger a year ago.

Drugmakers also advanced, with GlaxoSmithKline (GSK.L), Merck (MRCG.DE) and Novartis (NOVN.VX), rising 0.5 to 1.1 percent.

Miners were the biggest drag on the index as key base metals prices fell. BHP Billiton (BLT.L), Lonmin (LMI.L) and Rio Tinto (RIO.L) fell 1.5-1.7 percent.

Xstrata (XTA.L) fell 2.3 percent after giving up pursuit of rival Anglo American (AAL.L) due to value issues after many Anglo shareholders rejected its merger of equals proposal and demanded a premium.

Anglo American fell 3.7 percent.

Futures for the Dow Jones DJc1, S&P 500 SPc1 and Nasdaq NDc1 were flat. Traders will watch inflation data and weekly jobless claims, due out before the market opens.