* FTSEurofirst 300 index closes 8.9 percent higher
* Second-biggest one-day percentage gain on record
* Banks, energy, mining stocks rally
By Atul Prakash
LONDON, Nov 24 (Reuters) - European shares ended sharply
higher on Monday, as Washington's move to rescue banking giant
Citigroup <C.N> and the UK government's measures to help the
economy boosted sentiment and lifted commodities and banks.
The FTSEurofirst 300 <> index of top European shares
bounced back to finish 8.9 percent higher at 828.63 points --
its second-biggest one-day percentage rise on record. The index
lost 11.5 percent last week to hit a five-and-a-half-year low.
It has fallen 45 percent this year, hurt by the financial
sector crisis and the prospect of a deep recession.
Banking shares surged after slipping in the previous
sessions, with UBS <UBSN.VX> soaring 21.4 percent, Lloyds TSB
<LLOY.L> jumping 18.4 percent, HBOS <HBOS.L> climbing 17.3
percent and Royal Bank of Scotland adding 7.2 percent.
Barclays <BARC.L> closed 10 percent higher after its
shareholders backed a $10 billion fundraising, but Standard
Chartered <STAN.L>, which sought new funds too, slipped 4.5
percent as investors absorbed the weekend rescue of Citigroup.
"The rescue of Citigroup, which provided a huge amount of
uncertainty last week, hopes that Barack Obama can put the right
team together to deal with the economic turmoil and expectations
of a stimulus package from the UK are helping the markets to
bounce back," said Barclays Stockbrokers strategist Henk Potts.
"In the short term, equities are still expected to remain
volatile. The reality is economic growth is slowing down and
corporate profitability is under pressure."
Britain and the United States moved to unveil their newest
strategies to battle the global economic crisis even as European
fears of a long-lasting recession deepened. []
The United States agreed to inject $20 billion of new
capital to rescue one of the world's top banks and European
leaders said they would stand by European industry, especially
the automobile sector.
Britain will spend billions of borrowed pounds to fund tax
cuts in the hope of preventing a recession spiralling into a
slump, Finance minister Alistair Darling said, but he slashed
his economic growth forecast for this year to 0.75 percent from
1.75-2.25 percent.
SUSTAINED RALLY?
Darren Winder, strategist at Cazenove, said that a rally in
stock markets on Monday was unlikely to prompt a sustained rise,
given the ongoing credit crisis and weak economic outlook.
"The markets are bumping along the bottom at the moment ...
we are stabilising but with high levels of volatility."
Concerns Europe has entered a deep recession which could
last well into next year were reinforced when a key survey of
German corporate sentiment hit its lowest level in nearly 16
years in November. [] []
Miners tracked higher metals prices. BHP Billiton <BLT.L>,
Anglo American <AAL.L>, Vedanta Resources <VED.L>, Lonmin
<LMI.L>, Kazakhmys <KAZ.L>, Xstrata <XTA.L>, Antofagasta
<ANTO.L> and Rio Tinto <RIO.L> spiked between 13 and 28 percent.
A 7 percent jump in crude prices helped energy stocks. BP
<BP.L>, Royal Dutch Shell <RDSa.L>, gas producer BG Group <BG.L>
and Tullow Oil <TLW.L> added between 7.4 and 14.1 percent.
Among individual companies, Anheuser-Busch InBev <INTB.BR>
launched a planned eight-for-five rights issue at a steeply
discounted price of 6.45 euros per share to part-fund InBev's
$52 billion purchase of Anheuser-Busch, sending its stock price
20 percent down.
Roche Holding AG <ROG.VX>, the world's largest maker of
cancer drugs, rose 7.7 percent after it said that Avastin met
its primary endpoint in a Phase III breast cancer trial.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC-40 <> were up between 9.8 percent
and 10.3 percent.
(Editing by Jon Loades-Carter)
