Banks, commods, Philips lead European shares higher

                                
 * FTSEurofirst 300 index up 0.9 percent
                                
 * Banks, commodity shares gain
                                
 * Philips Electronics soars, beats expectations
                                
 By Joanne Frearson
                                
 LONDON, Oct 12 (Reuters) - European shares were higher in
early trade on Monday, with banks and commodity shares topping
the risers and Philips Electronics <PHG.AS> gaining after its
third-quarter results beat forecasts.
                                
 By 0835 GMT the pan-European FTSEurofirst 300 <.FTEU3> index
of top shares was up 0.9 percent at 1,006.91 points.
                                
 The benchmark index is up 20 percent so far this year and
has gained 55 percent since reaching a lifetime low in early
March.
                                
 "There is a bit more enthusiasm in the market, based on the
view that corporate figures are going to be more positive," said
Justin Urquhart Stewart, director at Seven Investment Management.
                                
 Banks were the top gainers, although individual stocks were
mixed in the sector. HSBC <HSBA.L>, Banco Santander <SAN.MC> and
Deutsche Bank <DBKGn.DE> were up 0.8 to 1.4 percent.
                                
 However, Barclays <BARC.L> fell 0.7 percent. The Financial
Times reported that it is planning to spin off a 4-billion-pound
($6.35 billion) portfolio of complex credit assets as it presses
ahead with a process to clean up its balance sheet.
                                
 British bank Lloyds <LLOY.L> slipped 0.2 percent after the
Sunday Times reported it has lined up a syndicate of investment
banks to underwrite an 11 billion-pound ($17.6 billion) rights
issue. [ID:nLB681307]
                                
 Energy stocks featured among the best performers as crude
oil <Clc1> rose over 1 percent. BG Group <BG.L>, BP <BP.L>, Dana
Petroleum <DNX.L> and Total <TOTF.PA> gained 0.3 to 3.6 percent.
                                
 
                                
 PHILIPS ELECTRONICS SOARS
                                
 Dutch conglomerate Philips Electronics' shares rose 6.5
percent after it reported a better than expected third-quarter
operating profit as a result of cost reductions but the company
remained cautious, seeing no recovery in many of its markets.
[ID:nLC210070]
                                
 "Philips has had such a rocky past. It is now having a
positive time and is doing better," said Howard Wheeldon,
strategist at BGC Partners.
                                
 Nokia <NOK1V.HE> gained 2.5 percent ahead of results on
Thursday. The Finnish mobile phone maker is expected to report a
69 percent fall in third-quarter pretax profit to 435 million
euros ($640 million) after consumers cut spending in the
downturn, a Reuters poll of 37 analysts showed.
                                
 Later in the week results are due from IBM <IBM.N>, Intel
<INTC.O>, JPMorgan Chase <JPM.N>, Goldman Sachs <GS.N>, Bank of
America <BAC.N> and General Electric <GE.N>.
                                
 The drugs sector was also on the advance after the World
Health Organisation (WHO) official said that the vaccines
developed against the H1N1 flu strains were yielding larger
volumes than first expected.
                                
 Roche <ROG.VX>, GlaxoSmithKline <GSK.L> and Novartis
<NOVN.VX> were up 0.9 to 1.2 percent.
                                
 The only sector in the red was beverages, with Carlsberg
<CARLb.CO> and Heineken <HEIN.AS> losing 2 to 2.4 percent.
                                
 Across Europe, the FTSE 100 <.FTSE> index was up 1 percent,
Germany's DAX <.GDAXI> was 1.4 percent higher and France's CAC
40 <.FCHI> rose 1.1 percent.
 (Editing by Greg Mahlich)