* Eurofirst 300 index closes 0.6 pct higher
* Banks gain after U.S. Fed move
* Commods rise tracking higher crude, copper prices
By Joanne Frearson
LONDON, March 19 (Reuters) - European shares closed higher
on Thursday with banks and commodities taking the lead, but
gains were capped as investors fretted about the implications of
a U.S. plan to pump $1 trillion into the economy.
The pan-European FTSEurofirst 300 <> index of top
shares provisionally closed up 0.6 percent at 715.17 points,
well away from the day's high of 730.22 points.
"The initial euphoria surrounding the bond purchase scheme
does appear to have worn off a bit. The U.S. is lower which is
dragging Europe down," said Peter Dixon, strategist at
Commerzbank.
"My view has been why in the short term would a scheme that
basically supports the bond market be supportive for equities.
If you are looking for capital gains in the short term you are
probably better off holding fixed income rather than equities,"
he said.
Financials were the major gainers. Barclays <BARC.L> gained
17.2 percent, while HSBC <HSBA.L>, Standard Chartered <STAN.L>,
UBS <UBSN.VX>, UniCredit <CRDI.MI> and Credit Suisse <CSGN.VX>
were 2.6-6.8 percent higher.
Across Europe, the FTSE 100 <> index was up 0.3
percent, Germany's DAX <> was 1.2 percent higher and
France's CAC 40 <> was up 0.6 percent.
The U.S. Federal Reserve on Wednesday stunned markets by
announcing it would pump another $1 trillion into the ailing
U.S. economy by buying long term government debt and by
expanding its purchases of mortgage bonds. []
"This is a big step, but bottoming out is a process -- it's
way too early to say this is the turning point," said Philippe
Gijsels, strategist at Fortis in Brussels.
PRUDENTIAL SOARS
British insurer Prudential <PRU.L> soared 13.4 percent after
the group beat forecasts by reporting a 17 percent rise in
annual profit, driving its share price higher despite it
announcing the departure of Chief Executive Mark Tucker.
Nonlife-insurers were also higher following the Fed
announcement. Allianz <ALVG.DE>, Axa <AXAF.PA> and Zurich
Financial <ZURN.VX> were up 6.3-12.6 percent.
Energy stocks jumped as crude <CLc1> rose nearly 7 percent.
BG Group <BG.L>, BP <BP.L>, Tullow Oil <TLW.L> and Total
<TOTF.PA> were up 0.2-2.3 percent.
Miners were higher as copper <MCU3=LX> ticked up 3.4
percent. Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP
Billiton <BLT.L>, Eurasian Natural Resources Corporation
<ENRC.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L> were up 7.1-13.7
percent.
Drugmakers were in the doldrums as investors sold out of
defensives into more cyclical sectors. GlaxoSmithKline <GSK.L>,
Sanofi-Aventis <SASY.PA>, Novartis <NOVN.VX> and AstraZeneca
<AZN.L> fell 3.1-5 percent.
The defensive telecommunications sector was also lower.
Vodafone Group <VOD.L>, DT Telekom <DTEGn.DE> and Immarsat
<ISA.L> were down 2.5-2.6 percent.
Celesio <CLSGn.DE> fell 7.7 percent after Commerzbank and
Goldman Sachs analysts said they see a slowdown ahead for the
pharmaceutical wholesaler, with sales not picking up until after
mid 2009.
(additional reporting Sitaraman Shankar; editing by Elaine
Hardcastle)
