Rising banks propel European stocks to 2-month high

                                
 * FTSEurofirst 300 index up 0.6 pct, hits 2-month high
                                
 * Banks higher after U.S. Federal Reserve comments
                                
 * Inditex rises after posting strong sales
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]

                                
 By Joanne Frearson
                                
 LONDON, March 17 (Reuters) - European shares hit a two-month
high on Wednesday, led by the banking sector, after the U.S.
Federal Reserve pledged to keep interest rates near zero for an
extended period.
                                
 By 0937 GMT, the pan-European FTSEurofirst 300 <.FTEU3>
index of top shares was up 0.6 percent at 1,067.21 points after
touching 1,067.38, the highest level since Jan. 20.
                                
 HSBC <HSBA.L>, Intesa SanPaolo <ISP.MI>, BNP Paribas
<BNPP.PA> and UBS <UBSN.VX> rose 0.3 to 1.4 percent.
                                
 Italy's biggest bank UniCredit <CRDI.MI> gained 4.5 percent
after it beat forecasts for 2009 net profit and returned to a
cash dividend to shareholders. [ID:nLDE62E1RU]
                                
 In its comments on Tuesday, the Fed sounded more upbeat
about the job market and said inflation was likely to remain
subdued. [ID:nN16251615]
                                
 "There was no new bad news so this is good. I think the
market can continue its upward trend to the end of the quarter,"
said Giuseppe-Guido Amato, strategist at Lang & Schwarz in
Frankfurt.
                                
 Miners were in demand as copper <MCU3=LX> edged 1.2 percent
higher as the dollar held near a one-month low following the Fed
move.
                                
 Anglo American <AAL.L>, BHP Billiton <BLT.L>, Eurasian
Natural Resources Corporation <ENRC.L>, Rio Tinto <RIO.L> and
Xstrata <XTA.L> were up 0.3 to 1.4 percent.
                                
 
                                
 ENERGY IN DEMAND
                                
 Energy stocks gained as crude <CLc1> rose 0.5 percent. BG
Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and Premier
Oil <PMO.L> were 0.3 to 0.9 percent higher.
                                
 Looking at individual stocks, Europe's biggest clothing
retailer Inditex <ITX.MC> gained 3.2 percent after it showed
strong sales growth in the first six weeks of the new year.
[ID:nLDE62F2IM]
                                
 Security group G4S <GFS.L> lost 4.4 percent in early trade
after traders cited talk that top shareholder Skagen Trust is
selling 141 million shares in the company. [ID:nLDE62G0FS]
                                
 Porsche <PSHG_p.DE> slipped 1.7 percent after the sports car
maker forecast a low single-digit billion euro net loss for the
fiscal year of 2009/2010 due to accounting effects in connection
with the planned Volkswagen <VOWG_p.DE> merger. [ID:nLDE62E24B]
                                
 In economic news, the Bank of England's Monetary Policy
Committee voted unanimously to keep monetary policy unchanged
this month but some noted an increase in upside inflation risks
from the fall in the pound. [ID:nBOE002280]
                                
 Across Europe, the FTSE 100 <.FTSE> index was up 0.2
percent, Germany's DAX <.GDAXI> rose 0.4 percent and France's
CAC 40 <.FCHI> was 0.2 percent higher.
 (Reporting by Joanne Frearson;  Editing by Rupert Winchester)