European shares up, weaker euro seen boosting earnings
* FTSEurofirst 300 up 0.4 pct, extends Wednesday's rebound
* Euro hits near two-year low vs dollar, seen boosting earnings
* H&M drops after saying sales slowing in September
* Telecom Italia up on report businessman seeks finance for bid
By Atul Prakash and Blaise Robinson
LONDON, Sept 25 (Reuters) - European shares extended the previous session's rebound on Thursday as a further drop in the euro fuelled expectations of a boost to the region's corporate earnings.
The single currency fell to its lowest level in nearly two years, reflecting a widening divergence between the monetary policies outlooks of the U.S. Federal Reserve and the European Central Bank.
After proving a major headwind for exporters in the first part of the year, the sharp slide in the euro - down 9 percent against the dollar since early May - is seen bringing much-needed breathing space for European companies.
"The currency headwind reversed in the third quarter and became a tailwind. And the U.S. economy is performing pretty well which should also benefit European earnings. We see the European stock market grinding higher in the medium-term," Robert Parkes, director of equity strategy at HSBC, said. Continuación...