G7 currency intervention pushes European shares up

                                
 * FTSEurofirst 300 up 0.4 percent
                                
 * Industrial stocks gain; Schneider rises
                                
 * Banks fall as regulators haggle
                                
 * For up-to-the minute market news, click on [STXNEWS/EU] 
                                
 
                                
 By Joanne Frearson
                                
 LONDON, March 18 (Reuters) - European shares, led by
industrials, rose on Friday after the Group of Seven nations
helped calm market nerves over the Japanese earthquake-tsunami
disaster by intervening to restrain a soaring yen.
Uncertainty still surrounded the Japanese nuclear power
plant crisis and tensions remained high in the Middle East and
north Africa after the United Nations authorised military
strikes on Libya. [ID:nLDE72H00G]
                                
 The pan-European FTSEurofirst 300 <.FTEU3> index of top
shares was up 0.4 percent at 1,091.00 points by 0912 GMT, having
closed up 1.8 percent on Thursday. The industrial sector
featured among the best performers, with the STOXX Europe 600
Industrial Goods & Services <.SXNP> rising 1.4 percent.
                                
 "The G7 intervention is calming the markets, but we still
need a few days of consolidation to think we are over the worst
of it," Giles Watts, head of equities at City Index, said.
                                
 The yen fell after central banks around the world agreed to
jointly intervene in the currency market. [ID:nL3E7EH3HN]
                                
 "It is just helping sentiment and stocks sensitive to risk
will push on. But, optimism is going to be guarded as there are
no firm resolutions surrounding the Japanese nuclear crisis and
the Middle East and anything can happen on the weekend," Watts
said.
                                
 Buyers were in Schneider <SCHN.PA> which gained 3.7 percent
as analysts said the company would be helped by a push towards
being energy efficient following the Japan nuclear disaster.
                                
 
                                
 BANKS FALL
                                
 Investors were also watching banks after the Europe Union's
banking watchdog said a stricter capital definition had still
not been agreed for the second round of stress tests, with
traders concerned about which lenders had sufficient capital to
withstand economic shocks.  [ID:nLDE72G1RT]
                                
 The STOXX Europe 600 Banks <.SX7P> index fell 0.3 percent,
with Banco Santander <SAN.MC>, BBVA <BBVA.MC> and Barclays
<BARC.L> down 0.8-1.1 percent.
                                
 However, following a sell-off early in the week, investor
appetite for riskier assets had improved, with the VDAX-NEW
volatility index <.V1XI> continuing its drop from the previous
session, down 9 percent after a recent nine-month high.
                                
 The higher the volatility index, based on sell and buy
options on Frankfurt's top-30 stocks <0#.GDAXI>, the lower
investor appetite for risky assets such as stocks.
                                
 Looking at valuations, analysts said stocks were good value.
                                
 "On 12-month forward earnings both European and UK equities
are inexpensive, both trading over 25 percent below average.
Using price to book, which avoids the short term risk to the
earnings forecast,equities are around averagely valued,"
Citigroup said.
                                
 Equity valuations on Thomson Reuters Datastream showed the
STOXX Europe 600 <.STOXX> carrying a forward price-to-earnings
ratio of 10.8, below a 10-year average of 13.6, Thomson Reuters
Datastream showed.
                                
 Across Europe, the FTSE 100 <.FTSE> index was up 0.4
percent, Germany's DAX <.GDAXI> was 0.5 percent higher and
France's CAC 40 <.FCHI> was up 0.7 percent.
 (Reporting by Joanne Frearson; Editing by Dan Lalor)