Europe shares hit two-week high after Obama win

European stocks rallied early on Wednesday as the re-election of U.S. President Barack Obama fuelled expectation the Federal Reserve's quantitative easing will continue.

Despite Obama's victory, the balance of power in the U.S. Congress stayed mostly unchanged, keeping intact the risk of a standoff in the "fiscal cliff" talks about $600 billion in spending cuts and tax increases, which are set to be automatically triggered at the end of the year unless a deal is reached.

At 0809 GMT, the FTSEurofirst 300 index of top European shares was up 0.5 percent at 1,119.92 points, a level not seen in two weeks.

"It certainly brings visibility on U.S. policy, which is positive for markets. Now the focus moves on (to) the fiscal cliff," a Paris-based equity and exchange-traded fund trader said.

"With no big shift of power in Congress, will Obama manage to get a deal on the fiscal cliff? That's the question."