* FTSEurofirst 300 rises 0.9 pct to 28-month closing high
* Banks, miners among top gainers
* Glaxo extends falls on legal charge
By Brian Gorman
LONDON, Jan 18 (Reuters) - European shares hit their highest
close in more than 28 months on Tuesday, as euro zone finance
ministers inched towards improving a rescue fund and investor
confidence grew in Germany.
The FTSEurofirst 300 <> index of top European shares
rose 0.9 percent to 1,167.87 points, the highest close since
September 2008. The benchmark is up more than 80 percent from
its lifetime low of March 2009.
Banks to gain included Spanish heavyweights Banco Santander
<SAN.MC> and BBVA <BBVA.MC>, up 4 and 3.7 percent respectively.
Bank of Ireland <BKIR.I> and KBC <KBC.BR> rose 7.7 and 7.1
percent respectively.
European finance ministers inched forward on Tuesday towards
beefing up the euro zone's rescue fund and preparing new stress
tests for the region's shaky banks. []
"Clearly the fact that finance ministers are meeting and
heads of state are going to meet in March indicates that they
are taking the (euro zone debt) problem more seriously than
three months ago," said Richard Batty, strategist at Standard
Life Investments in Edinburgh.
"There is some movement towards a resolution though it is a
very long process. The market is giving some form of benefit of
the doubt to that process."
Miners gained as metal prices rose. Copper came within a
whisker of record highs on Tuesday as investors shone the
spotlight on improving economic growth prospects and a softer
dollar helped boost sentiment.
Antofagasta <ANTO.L>, Eurasian Natural Resources Corp.
<ENRC.L> and Kazakhmys <KAZ.L> rose between 2.7 and 3 percent.
Rio Tinto <RIO.L> rose 1.5 percent after it reported
producing record volumes of key product iron ore in the fourth
quarter. []
Energy companies gained as Brent crude <CLc1> topped $98.
BP <BP.L>, BG <BG.L> and Repsol <REP.MC> rose between 1.7 and 4
percent.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC40 <> rose between 0.9 and 1.2
percent. Spain's benchmark <> rose 3 percent.
But Batty said any rally might be short-lived as the
European currency is too strong, and added that he was slightly
underweight in European equities, preferring corporate bonds. He
said bonds and equities were "highly correlated" but bonds were
yielding 9 to 10 percent, and had a lower beta.
GLAXO FALLS FURTHER
On the downside, GlaxoSmithKline <GSK.L> shares extended
losses, falling a further 1.9 percent after shedding 1.6 percent
on Monday when the drugmaker announced a 2.2 billion pounds
($3.4 billion) legal charge that will wipe out profits in the
fourth quarter.
Investor sentiment in Germany, Europe's biggest economy,
surged in January as expectations increased that its powerful
export machine will create jobs and investment this year to spur
further robust growth.
The ZEW think-tank based in Mannheim, Germany, said on
Tuesday its monthly index jumped to 15.4 points from 4.3 in
December, its highest since last July. []
"Markets are driven mostly by the ZEW figure, technical
reasons and enduring good mood regarding company earnings," said
Roger Peeters, strategist at Close Brothers.
U.S. stocks, trading for the first time since Friday, edged
up, though Citigroup <C.N> was down more than 6 percent after
the bank's results missed forecasts.
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Euro zone-contagion: http://link.reuters.com/nap85r
Euro zone-bonds: http://link.reuters.com/gap85r
Stories on euro zone crisis []
Comments by EU officials, finance ministers []
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(Additional reporting by Harro ten Wolde; Editing by Hans
Peters)
