* FTSEurofirst 300 ends 0.6 pct higher
* Banks, oils top weighted gainers
* French stocks gain on stimulus plan hopes
By Sitaraman Shankar
LONDON, Nov 25 (Reuters) - European shares rose on Tuesday
as gains in banks, energy stocks and French equities offset
falls in autos and drugmakers and a slide in Rio Tinto <RIO.L>
after BHP Billiton <BLT.L> abandoned a bid for the miner.
The FTSEurofirst 300 <> index of top European shares
ended up 0.57 percent at 833.36 points, after having traded in a
wide range of 812.89 to 848.92, or between 1.9 percent lower and
2.5 percent higher.
French stocks were outperformers after President Nicolas
Sarkozy said that the government would launch a major stimulus
plan to revive the flagging economy within the next 10 days.
Cement group Lafarge <LAFP.PA>, banks Societe Generale
<SOGN.PA> and Credit Agricole <CAGR.PA>, and steelmaker
ArcelorMittal <MTP.PA> all gained more than 7 percent.
On the other side of the Atlantic, the U.S. Federal Reserve
announced a plan to buy billions of dollars worth of debt and
mortgage-backed securities to loosen up the flow of credit for
mortgages, loans for students, autos and credit cards.
"This is another in a series of significant measures over
the past few weeks -- slowly but surely they're starting to
stabilise sentiment," said Darren Winder, head of macro and
strategy research at Cazenove.
"But fundamentally markets are bumping along the bottom with
high levels of volatility, and that pattern will continue. Falls
in profit haven't fully taken their course," he said.
Banks and energy stocks added most points to the European
index.
HSBC <HSBA.L> gained 6 percent and Credit Suisse <CSGN.VX>
jumped 11 percent, while Standard Chartered <STAN.L> rose 16
percent as its plan to raise 1.8 billion pounds in a rights
issue removed a a worry about its funding position, analysts
said.
BP <BP.L> gained 1.5 percent and BG Group <BG.L> rose 4
percent.
But Rio Tinto <RIO.L> plummeted 37 percent after BHP
Billiton <BLT.L> abandoned its bid for the group, while Novartis
<NOVN.VX>, GlaxoSmithKline <GSK.L> and Sanofi-Aventis <SASY.PA>
lost 2.5-4.1 percent ahead of an EU report on Friday expected to
criticise major European drugmakers for anti-competitive
practices.
Volkswagen <VOWG.DE> fell 23 percent, continuing its recent
wild counter-index moves.
The stock has endured falls of 10 percent or more in a day
seven times in the last three months, and risen by 10 percent or
more five times, driven by a short squeeze.
DATA, EARNINGS GLOOM
Macro economic news, however, continued to be gloomy.
The FTSEurofirst 300 has slumped 45 percent this year,
punctured by a credit crisis that piled up losses at banks and
tipped major economies into recession.
The U.S. economy contracted at its fastest pace in seven
years in the third quarter as consumer spending plunged to a
28-year low, data showed on Tuesday, raising the spectre of a
deeper recession.
In addition, German Finance Minister Peer Steinbrueck said
that the German economy could contract by as much as 1 percent
next year after official figures showed fading exports led the
country into recession in the third quarter.
Analysts have been downgrading earnings estimates through
the year, realising that the macro environment has made their
initial calculations far too optimistic.
"The over-optimism in the consensus earnings estimates is
widespread across sectors," UBS strategist Nick Nelson wrote in
a note, adding that, from a top-down perspective, he expected
earnings to fall around 30 percent peak to trough across Europe.
Across Europe, Britain's FTSE 100 <> rose 0.4 percent,
Germany's DAX <> ticked up 0.1 percent and France's CAC
<> ended 1.2 percent higher.
(Reporting by Sitaraman Shankar; editing by Simon Jessop)
