* FTSEurofirst 300 up 0.5 percent
* Insurers gain on consolidation speculation
* Pharmaceuticals, banks among broad but shallow rally
By Simon Falush
LONDON, Sept 30 (Reuters) - European shares rose early on
Wednesday, lifted by strength among pharmaceuticals and
insurers, as investors looked to add to gains on the final day
of an exceptionally strong quarter.
At 0837 GMT the FTSEurofirst 300 <> index of top
European shares was up 0.5 percent at 1,007.07 after gaining 0.1
percent on Tuesday.
The benchmark index is up 21 percent this year and has
surged 55.9 percent from a record low in early March. It has
jumped 18.7 percent since the end of June -- on track for its
best quarter in almost a decade.
Banks were higher, shrugging off early weakness as risk
appetite remained relatively strong. Barclays <BARC.L>, BNP
Paribas <BNPP.PA> and Allied Irish Banks <ALBK.I> were up 0.2 to
3.1 percent.
"We're coming to the end of a very strong quarter and there
is some marking up still going on ... people are saying 'we've
made a nice profit, lets not spoil it' but I think there's
massive room for disappointment," said Philippe Gijsels senior
equity strategist at Fortis Bank, in Brussels.
He noted that U.S. consumer confidence data on Tuesday was
disappointing and that there was further scope for weak data to
spook the markets.
Pharmaceuticals were also positive. Astrazeneca <AZN.L>,
Novartis <NOVN.VX> and Elan <ELN.I> added 0.2 to 1.5 percent.
Insurers were up, with consolidation talk boosting the
sector. Old Mutual <OML.L>, Prudential <PRU.L> Swiss Life
<SLHN.VX> and ING Groep <ING.AS> added 1.7 to 2.5 percent.
But Legal & General <LGEN.L> topped the sector, up 4.8
percent, boosted by an upgrade to "hold" from "sell" by Deutsche
Bank as well as ongoing speculation that it might be the target
of a bid from Resolution <RSL.L>.
Across Europe, Germany's DAX <>, France's CAC <>
and Britain's FTSE 100 <> were up 0.2 to 0.4 percent.
MINERS GAIN
Miners were broadly stronger as metal prices gained.
Rio Tinto <RIO.L>, Xstrata <XTA.L>, Lonmin <LMI.L>, Anglo
American <AAL.L> and Kazakhmys <KAZ.L> gained between 0.2 and
1.1 percent.
But some investors were sceptical about whether the rally
can be sustained into the year-end.
"The theme will be -- we're coming out of recession, but
where is the growth coming from?," said Justin Urquhart-Stewart,
investment director at Seven Investment Management.
"The rally will run out of steam, but investors who were
stuck in cash will still want to get in, so bring the yo-yos
out."
Man Group <EMG.L>, the world's largest hedge fund, topped
the leaderboard by gaining 7.8 percent after it said slowing
outflows helped lift assets to an estimated $43.8 billion at
end-September. []
Raiffeisen <RIBH.VI> was among the top European risers, up
4.1 percent after BofA-Merrill Lynch added it to its Europe 1
and EEMEA 1 lists.
Smiths Group <SMIN.L> was the top gainer in Europe, up 6.3
percent, after the technology company reported full-year results
showing a 21 percent fall in underlying full-year results, which
analysts say were better than feared.
But Marks & Spencer <MKS.L> dipped 1.5 percent after
analysts said the better-than expected sales and profit margins
were factors into a recent rally in shares while a downgrade in
its cost guidance was not.
But chemicals producers were the biggest drag on the index.
BASF <BASF.DE> and Solvay <SOLB.BR> fell 0.8 and 0.9 percent
respectively while Bayer <BAYGn.DE> fell 3.9 percent after UBS
removed it from its European chemicals "most preferred list".
Later investors' attention will turn to economic data in the
United States, including the ADP Employment report. The final
reading of GDP data for the second quarter is expected to show
that the economy shrank at an annualised rate of 1.2 percent.
(Reporting by Simon Falush; Editing by Hans Peters)
