* FTSEurofirst 300 gains 0.9 percent
* Weaker crude prices lift sentiment, help banks
* Energy, mining stocks slip tracking weaker commodities
By Atul Prakash
LONDON, Sept 2 (Reuters) - European shares rose on Tuesday
as a slide in crude prices tempered inflation concerns and
boosted banking stocks, while AXA <AXAF.PA> led insurers higher
on relief that Hurricane Gustav was weaker than feared.
The FTSEurofirst 300 <> index of top European shares
closed 0.9 percent higher at 1,200.20 points, after trading in a
broad range of 1,182.72-1,205.80 points. The index fell 0.45
percent on Monday and is down 20 percent so far this year.
The banking sector was the top-weighted sectoral gainer on
the index, while insurers and retailers also advanced. But
weaker commodities prices hit energy and mining stocks.
BNP Paribas <BNPP.PA> rose more than 4 percent, Credit
Agricole <CAGR.PA> was up nearly 4 percent, Dexia <DEXI.BR>
advanced 3.6 percent and Fortis <FOR.BR> gained 4 percent.
"Continued decline in oil prices in the wake of Hurricane
Gustav passing by is seen as a positive factor for growth," said
Andrew Bell, head of research at Rensburg Sheppards.
"I don't think I would want to rely too heavily on the
little renewed bout of optimism but, as far as it goes, what it
suggests is that economy is stagnating rather than plunging and
a fall in the oil price gives hope that one of the big headwinds
in the last few months will turn into a tailwind."
Oil <CLc1> traded around $109 a barrel after sliding to
five-months lows after initial reports showed Hurricane Gustav
had spared major U.S. Gulf oil facilities. Gold, silver,
platinum, copper and aluminium prices also slipped.
"Lower oil prices certainly help the market," said Mike
Lenhoff, strategist at Brewin Dolphin. "Lower inflation will
pave the way for cuts in interest rates.
Insurance companies were among the biggest gainers, with Axa
<AXAF.PA> up 7.2 percent, Aegon <AEGN.AS> up 4.5 percent and
Aviva <AV.L> up 3.3 percent.
Across Europe, Britain's FTSE <> rose 0.3 percent,
while Germany's DAX <> and France's CAC <> both
jumped 1.5 percent.
COMMODITIES TRACK WEAKER CRUDE, METALS
Oils and mining stocks slipped, tracking a slide in
commodities prices.
Miners were the top sectoral loser, with BHP Billiton
<BLT.L>, Anglo American <AAL.L>, Vedanta Resources <VED.L>,
Kazakhmys <KAZ.L>, Xstrata <XTA.L>, Antofagasta <ANTO.L> and Rio
Tinto <RIO.L> falling between 2.7 and 4.8 percent.
In industry news, the European Commission delayed its review
of plans by BHP Billiton <BHP.AX>, the world's largest mining
group, to buy rival Rio Tinto as it awaited more information.
Energy companies also suffered, with BP <BP.L>, Royal Dutch
Shell <RDSa.L>, gas producer BG Group <BG.L> and Tullow Oil
<TLW.L> shedding between 1.8 and 5.1 percent.
Natural gas producer Chesapeake Energy Corp <CHK.N> said it
had agreed to sell a 25 percent interest in its Fayetteville
Shale assets in Arkansas for $1.9 billion to a unit of BP
<BP.L>.
Despite a recovery in European stocks, investors remained
cautious due to uncertain economic and financial sector outlook.
The Organisation for Economic Co-operation and Development
said Europe's economy was slowing more sharply than predicted,
Britain was near recession and the United States and Japan were
faring little better.
British Prime Minister Gordon Brown cut an unpopular tax on
home purchases as part of a package designed to boost the
country's slumping housing market and lift his flagging
political fortunes.
(Additional reporting by Brian Gorman; Editing by Quentin
Bryar)
