* FTSEurofirst 300 index rises 1.4 pct to 2-wk closing high
* Oils rise on higher crude price
* Air France up on stronger traffic
By Brian Gorman
LONDON, June 3 (Reuters) - European shares rose to a
two-week closing high on Thursday as oil companies bounced,
helped by a surge in the crude price, and growth in the euro
zone services sector boosted investor sentiment.
The pan-European FTSEurofirst 300 <> index of top
shares rose 1.4 percent to 1,017.50 points, the highest close
since May 18. The index is still down more than 8 percent from a
mid-April peak on worries a debt crisis in the eurozone could
derail economic recovery.
"It's a relief rally, a snapback, after these horrifying
days and weeks, with the Greek and European tragedy," said Franz
Wenzel, strategist at AXA Investment Managers in Paris.
"But we don't see any improvement, economically or
valuation-wise. We expect shares to trade in a range. For
European equities to go back on the upward trend, we would need
to see political coherence, which is currently not in sight."
Energy companies were among the biggest gainers, bouncing
from recent weakness, with the oil price <CLc1> rising
immediately after a government oil inventory report showed crude
oil stocks fell more than expected last week. []
Prices later fell back, hurt by a stronger dollar, to about
$73.
BG <BG.L>, Royal Dutch Shell <RDSa.AS>, Total <TOTF.PA> and
ENI <ENI.MI> rose between 1.6 and 3.1 percent.
BP <BP.L> closed 0.6 percent higher, having been up by more
than 4 percent in morning trade.
It is down more than a third from its mid-April peak as it
struggles to contain an oil spill in the Gulf of Mexico. More
than 40 billion pounds has been wiped off its value.
Banks were among the gainers in a broad market rally.
Barclays <BARC.L>, Credit Agricole <CAGR.PA> and Lloyds <LLOY.L>
rose between 2.1 and 2.5 percent.
Wall Street was slightly higher around the time European
bourses were closing. The Dow Jones <> was flat; the S&P 500
<.SPX> and Nasdaq Composite <> were up 0.2 and 0.5 percent
respectively.
A raft of U.S. data was mostly positive but factory orders
disappointed. New orders received by U.S. factories rose 1.2
percent in April, U.S. Commerce Department data showed, marking
a slowdown from March's surprisingly robust gain.
[]
U.S. private sector employers added jobs in May and the
economy's dominant services sector increased payrolls for the
first time in more than two years. The data comes ahead of the
all-important monthly non-farm payroll figures on Friday.
AIR FRANCE RISES
Among individual companies, Air France <AIRF.PA> ranked
among Europe's top gainers, up 6.1 percent after reporting a
"marked" recovery in traffic.
In European indicators, the Markit Eurozone Services
Purchasing Managers' Index (PMI) grew in May at its fastest pace
since August 2007, bringing to an end an almost two-year stretch
of job losses among services companies. []
(Editing by David Cowell)
