* FTSEurofirst 300 jumps 2.4 percent
* Financials gain on hopes recession abating
* Energy shares track higher crude; autos rise
By Atul Prakash
LONDON, May 18 (Reuters) - European equities closed higher
on Monday as financial stocks climbed on hopes a recession in
top global economies was abating, while energy shares tracked
higher crude oil prices.
The FTSEurofirst 300 <> index of top European shares
closed 2.4 percent higher at 859.88 points after falling as low
as 827.32. The index, which slumped 45 percent in 2008, is up 3
percent this year.
Financials were the top gainers, with Standard Chartered
Bank <STAN.L> rising 8.5 percent, HSBC <HSBA.L> up 4.4 percent,
Barclays <BARC.L> gaining 5 percent, Commerzbank <CBKG.DE> up 9
percent, KBC <KBC.BR> up 13 percent, Aegon <AEGN.AS> rising 11
percent and UniCredit <CRDI.MI> jumping 13.5 percent.
"The market is bouncing back after last week's weakness and
is showing that investors are prepared to increase their risk
appetite and continue to buy into the prospects of improving
economic background," said Henk Potts, equity strategist at
Barclays Stockbrokers.
"Clearly, the risk of a systemic failure in the global
banking system has been dramatically reduced over the course of
the past few weeks," he said.
Energy stocks powered higher, tracking a 3 percent jump in
crude prices <CLc1>. BP <BP.L>, Royal Dutch Shell <RDSb.L>,
Repsol <REP.MC>, Total <TOTF.PA>, BG Group <BG.L> and
StatoilHydro <STL.OL> added 1.4-4.5 percent.
Automakers also accelerated. BMW <BMWG.DE>, Daimler AG
<DAIGn.DE>, Peugeot <PEUP.PA> and Renault <RENA.PA> were up
0.2-2.8 percent.
Volkswagen <VOWG.DE> froze talks over a merger that could
bail out its majority owner Porsche SE <PSHG_p.DE>, leaving the
luxury carmaker scrambling to reassure investors a deal to unite
the two was still alive. [] Volkswagen rose 2.2
percent, while Porsche was down 0.1 percent.
Across Europe, the FTSE 100 index <>, Germany's DAX
<> and France's CAC 40 <> were up 2.3-2.4 percent.
IMPROVED SENTIMENT
Better-than-expected quarterly earnings from the
second-biggest U.S. home improvement retailer, Lowe's Cos
<LOW.N>, helped spur hope that global economic recovery may be
on the way.
Sentiment also improved after World Bank president Robert
Zoellick said the global economy may return to growth in late
2009 or in 2010, while European banking officials also saw
tentative signs the financial crisis could be easing.
Many economists and policymakers are cautiously optimistic
that sharp interest rate cuts, fiscal packages and bank bailouts
will eventually succeed and that the world has probably seen the
worst of the deepest recession since World War Two.
But some analysts remained cautious.
"For the wider market, today's rally has reclaimed a large
chunk of the ground given back towards the end of last week, but
again many seem to be resigning themselves to sideways trading
sessions over the next few weeks," said Anthony Grech, market
strategist at IG Index.
Nokia <NOK1V.HE> rose 2 percent as it unveiled three new
cellphone models, including the cheapest 3G phone to date from
the world's top handset maker.
German retailer Metro's <MEOG.DE> proposal to be part of a
solution for imperilled rival Karstadt cast a shadow over the
chances of Karstadt's parent company Arcandor receiving state
aid. Metro shares were up 5.6 percent. []
(Editing by Dan Lalor)
