Crude fall lifts Europe shares; euro boosts autos

                                
 * FTSEurofirst 300 up 0.7 percent
                                
 * Airlines, autos gain as oil, euro fall
                                
 * Miners and oil stocks limit index's advance
                                
 
                                
 By Joanne Frearson
                                
 LONDON, Sept 2 (Reuters) - European shares rose early on
Tuesday as a sharp fall in the oil price took the edge off
inflation concerns and lifted airlines and travel stocks, while
autos gained from a weakening euro.
                                
 At 0845 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was 0.7 percent higher at 1,198.16, recovering
from a low of 1,182.72 points.
                                
 Oil <CLc1> sank nearly $9.50 a barrel to around $106,
hitting its lowest since early April on initial signs that a
weakened Hurricane Gustav spared major Gulf oil facilities.
                                
 BP <BP.L>, Total <TOTF.PA>, StatoilHydro <STL.OL> and Royal
Dutch Shell <RDSa.L> fell between 1 and 2.4 percent.
                                
 "There is no real reason why the oil price should go up with
Hurricane Gustav weakening. The market should be led by further
weakness in the commodity price," said Justin Urquhart Stewart,
director at Seven Investment Management.
                                
 Airline stocks gained on the lower oil price, with Lufthansa
<LHAG.DE> up 3 percent, British Airways <BAY.L> up 5.2 percent
and Air France KLM <AIRF.PA> up 3 percent.
                                
 Travel operators were also helped by the lower oil price,
Thomas Cook Group <TCG.L> and Carnival <CCCL.L> both up over 5
percent.
                                
 Automobiles notched up strong gains, benefiting from a
weaker euro. German car maker Daimler <DAIGn.DE> ticked up 4.3
percent, while peer BMW <BMWG.DE> rose 5 percent, and France's
Renault <RENA.PA> edged up 4.2 percent.
                                
 German exchange operator Deutsche Boerse <DB1Gn.DE> rose 3.8
percent after its two biggest shareholders said they would work
together to explore all options for shareholder value creation.
                                
 In the UK banking sector, Barclays <BARC.L> was up 3 percent
on reports the group is in talks to sell 50 percent of its
Spanish insurance and pension business.
                                
 Across Europe, Britain's FTSE <.FTSE> rose 0.4 percent,
Germany's DAX <.GDAXI> gained 1.1 percent, and France's CAC
<.FCHI> rose 0.9 percent.
                                
 
                                
 TOO MANY BANKS?
                                
 Germany's Commerzbank <CBKG.DE> was down 2.8 percent as UBS
cut its price target to 19.5 euros from 22 euros. The bank is
buying rival Dresdner, a unit of insurer Allianz <ALVG.DE>, for
$14.5 billion.
                                
  "In Europe, there is still concern over the German  banking
sector and how much more rationalisation is needed. There are
too many banks and not enough business and little reason to be
positive," said Stewart.
                                
 Sticking with the downside, Alcatel-Lucent <ALUA.PA> fell 1
percent after the world's top provider of fixed-line telecoms
networks named a new management team.
                                
 Energy stocks fell sharply, with BP <BP.L>, StatOilHydro
<STL.OL> and Total <TOTF.PA> down 1.9-4 percent, while miners
also declined.
                                
 Rio Tinto <RIO.L> was among the heaviest drags on the index,
with a fall of 4 percent.
 (Reporting by Joanne Frearson, editing by Will Waterman)