* FTSEurofirst 300 rises 1.2 pct
* Banks, miners biggest sectoral gainers
* Oil shares rise despite falling crude prices
By Atul Prakash
LONDON, Jan 2 (Reuters) - European shares began the first
trading day of the year on a positive note, led higher on Friday
by banks and miners, but new data painted a bleak picture and
investors braced for another tough year after a terrible 2008.
At 0954 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1.2 percent at 841.52 points in thin
trading, after closing 0.9 percent higher on Dec. 31.
But the benchmark index posted a loss of 45 percent in 2008,
its biggest annual fall as the markets were shattered by the
worst economic crisis since the Great Depression of the 1930s.
Banks were the top sectoral gainers on Friday, with Dexia
<DEXI.BR> jumping 9.4 percent, HSBC <HSBA.L> adding 2 percent,
Royal Bank of Scotland <RBS.L> advancing 3 percent and UBS
<UBSN.VX> rising 2.7 percent.
Miners also advanced, with BHP Billiton <BLT.L>, Anglo
American <AAL.L>, Vedanta Resources <VED.L>, Xstrata <XTA.L>,
Antofagasta <ANTO.L> and Rio Tinto <RIO.L> rising between 2.9
and 9.4 percent.
"The good news about this year is that people have been so
pessimistic at the beginning of this year as opposed to being so
optimistic at the beginning of last year, they may have overdone
the pessimism," said Justin Urquhart Stewart, investment
director at Seven Investment Management.
"And that's quite sensible because there are some huge
challenges to face. The thing people should remember is that
equity markets generally recover in a recession, but it's like
trying to fight your ways through the dust after the explosion's
gone off," he said.
Fresh macroeconomic data reminded of another difficult year.
Manufacturing activity in the euro zone sank to a record survey
low in December, below an already dire flash reading and the
outlook remains grim as new orders also sank to new lows.
Market researchers Experian said on Thursday the downturn in
consumer spending will drive over 1,600 British retailers out of
business in 2009, triggering thousands of job losses and leaving
more than one in 10 shops empty.
Trading conditions for survivors would be the worst for at
least 30 years and there would be knock-on effects at suppliers,
manufacturers and service providers, the researcher said.
In another sign the world's largest emerging markets were
wilting under the recession that has gripped most industrialised
nations, factories in China, India and Russia slashed output and
jobs at a record pace in December.
OILS RISE, AUTOS ADVANCE
Energy shares rose in line with the broader equity market,
despite a sharp 8 percent decline in crude prices after a 14
percent rally in the previous session.
BP <BP.L>, Royal Dutch Shell <RDSb.L>, gas producer BG Group
<BG.L> and Tullow Oil <TLW.L> rose 1-3 percent.
Automakers also were in demand. Volkswagen AG <VOWG.DE>
gained 1.4 percent, BMW <BMWG.DE> advanced 1.9 percent and
Daimler AG <DAIGn.DE> was up 2 percent.
Nokia <NOK1V.HE> rose 1.6 percent. Its Chief Executive
Olli-Pekka Kallasvuo told the Financial Times that the company
will focus on profit development amid a falling cellphone market
in which many competitors are cutting prices.
Across Europe, the FTSE 100 index <> was up 0.8
percent, Germany's DAX <> rose 1.7 percent and France's
CAC 40 <> was 1.5 percent higher.
(Reporting by Atul Prakash; Editing by Hans Peters)
