* FTSEurofirst 300 rises 0.7 pct
* Mining stocks track higher metal prices
* Banks down on fears of Madoff exposure
By Atul Prakash
LONDON, Dec 15 (Reuters) - European shares advanced in
morning trade on Monday as commodity stocks tracked firmer crude
and metals prices, offsetting weaker banks led lower by BNP
Paribas <BNPP.PA>.
At 1022 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.7 percent at 835.04 points after rising
as high as 843.89. The benchmark has lost 44 percent in 2008,
but has gained 11 percent since this year's low on Nov. 21.
"As we go into the Christmas period, investors will be
looking to see if the so-called 'Santa rally' materialises over
December," said Chris Hossain, senior sales manager at ODL
Securities.
"The relative lack of volume often results in wild swings
over December, but it's fair to say that investors have got used
to volatility over the past six months."
Miners rose in line with higher metals prices. BHP Billiton
<BLT.L>, Anglo American <AAL.L>, Vedanta Resources <VED.L>,
Lonmin <LMI.L>, Kazakhmys <KAZ.L>, Xstrata <XTA.L>, and Rio
Tinto <RIO.L> rose between 0.8 and 5 percent.
Banks, however, fell after news that Spain and France's
largest banks, Santander <SAN.MC> and BNP Paribas <BNPP.PA>, and
Swiss private bank Reichmuth & Co became the latest parties to
detail possible losses over exposure to an investment fund run
by U.S. investor Bernard Madoff.
BNP Paribas shares fell 8.5 percent, Santander was down 3.4
percent and HSBC <HSBA.L> slipped 2.5 percent.
"The financials will remain in focus following fraud
allegations surrounding Madoff hedge funds. Focus will now turn
to who has and who hasn't got exposure to his hedge funds,"
Hossain said.
Trade in Fortis <FOR.AS> shares were suspended, pending a
statement on the financial impact of a court ruling suspending a
state-led deal to dismantle Fortis and sell Belgian assets to
BNP Paribas. []
However, shares in Ireland's banks rose as a pledge from the
country's government to bolster their capital with an injection
of up to 10 billion euros ($13.5 billion) was welcomed by
investors. Anglo Irish Bank <ANGL.I> jumped 19.4 percent.
Investors kept an eye on the U.S. Federal Reserve's two-day
policy meeting that starts on Monday. The Fed is widely expected
to lower the benchmark rate by a half-percentage point to 0.5
percent from 1 percent on Tuesday at the end of the meeting.
BANKS IN FOCUS; ELECTROLUX HIT
Investors awaited Goldman Sachs <GS.N> results on Tuesday
and Morgan Stanley <MS.N> results on Wednesday.
The banking sector is at the centre of a credit crisis that
has punctured global equities and tipped major global economies
into a recession now affecting corporate profits.
Electrolux <ELUXb.ST>, the world's second-biggest home
appliances maker, slipped 4.7 percent after it warned that 2008
results would fall short of expectations and said it would cut
more than 3,000 jobs globally.
Energy stocks tracked crude oil prices <CLc1>, which jumped
nearly 5 percent. BP <BP.L>, Royal Dutch Shell <RDSa.L>, gas
producer BG Group <BG.L> and Tullow Oil <TLW.L> added between
0.4 and 3.3 percent.
Automakers were mixed. BMW <BMWG.DE>, Daimler AG <DAIGn.DE>,
Peugeot <PEUP.PA, Fiat <FIA.MI> and Volkswagen <VOWG.DE> were up
0.2-2.2 percent, but Porsche <PSHG_p.DE> and Renault <RENA.PA>
fell 0.8 percent each.
The White House said on Friday the administration would
consider using part of the Treasury's $700 billion bailout
package for financial institutions to keep the U.S. Big 3
automakers afloat after a bailout legislation failed in the
Senate.
However, U.S. President George W. Bush said on Monday an
announcement on a auto industry rescue was not imminent.
Across Europe, the FTSE 100 index <> was 0.7 percent
up, Germany's DAX <> rose 1.4 percent and France's CAC 40
<> was 0.5 percent higher.
(Reporting by Atul Prakash; editing by Simon Jessop)
