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By Kit Rees and Helen Reid
LONDON, Jan 11 (Reuters) - European shares rose onWednesday, with retail stocks back in focus after awell-received update from British grocer Sainsbury,though Cobham tanked on disappointing profits.
The pan-European STOXX 600 index was up 0.2percent, while blue-chip FTSE 100 hit a record high of7,289.79, up 0.2 percent, and was headed for the best winningstreak in its history.
If the index closes up again today it will mark its 12thstraight higher close, the longest period of consecutive gainssince at least 1984. However the total gains have been modest,around 3.6 percent over the whole rally.
"The FTSE has not exploded higher, it has inched higher,"said Michael Hewson, CMC Markets analyst.
Sainsbury's was in the top European gainers,jumping 5.5 percent to reach its highest level since May, afterBritain's second-biggest supermarket beat forecasts forunderlying sales in its Christmas quarter.
This followed peer Morrison's strong performance inthe previous session after it too reported robust figures.
"UK supermarkets seem to be in rude health following bullishstatements from both Morrison's and Sainsbury's," said IGanalyst Josh Mahony.
Danish bioscience company Chr Hansen was top ofthe STOXX, gaining 5.4 percent on consensus-beatingfirst-quarter earnings.
British aero engineering firm Cobham weighed on theSTOXX, slumping more than 15 percent, after it missed its profittarget and scrapped its final dividend.
Cobham's 2016 trading profit fell short of a target it hadcut just two months before the end of the year because of poortrading. It was headed for its worst day ever, through nearlythree days' trading in mid-morning.
UBS equities analysts said a recent change in management,with a new CEO and CFO, meant further revisions were likely oncenew managers undertake a deep review of the business.
French utilities company Engie was the top CAC 40faller, down 3.5 percent after France's government sold 100million of its shares in the company at a 4 percent discount tothe closing price, though it remained main shareholder with a 29percent stake.
British tourism company TUI also weighed on theSTOXX, down 5.6 percent after a double downgrade from CreditSuisse to 'underperform' because of a difficult outlook for itstwo largest markets, the UK and Germany.
Britain's testing equipment manufacturer Spectris, however, benefited from a double upgrade from BAML to rise tothe top of the mid-cap FTSE 250, up 4.4 percent.
Spain's IBEX was the only major European index tofall, weighed down by banks BBVA and Banco Popular. (Reporting by Kit Rees, Helen Reid, editing by Vikram Subhedar,Larry King)
