* FTSEurofirst 300 index ends up 1.4 pct, 2-wk closing high
* Oils rise as Brent tops $101; dollar weakens
* Infineon, ARM Holdings give techs a boost
By Brian Gorman
LONDON, Feb 1 (Reuters) - Strong manufacturing data from the
euro zone and U.S. on Tuesday powered European shares to their
biggest gains in nearly three weeks, with oil stocks further
boosted by rising crude prices.
The pan-European FTSEurofirst 300 <> index rose 1.4
percent to a two-week closing high of 1,159.80 points.
Heavyweight energy shares gained as Brent crude <LCOc1> rose
well above $101 a barrel, helped by a weaker dollar which fell
to a 12-week low against a basket of currencies.
Total <TOTF.PA> and ENI <ENI.MI> rose 3.2 percent and 4.1
percent respectively. Statoil <STL.OL> surged 6.3 percent as
optimism on its upcoming quarterly results outweighed news of
more troubles at its Gullfaks field in the North Sea.
BP <BP.L> rose 1.3 percent despite reporting a loss and a UK
court blocking its plans for a tie-up with Russia's Rosneft.
[]
Worries about unrest in Egypt spreading to neighbouring
major oil-producing countries have been a factor in forcing up
crude prices, but some analysts have played down this risk.
"There is limited contagion risk from Egypt," Bob Parker,
senior adviser at Credit Suisse, said. "If we did see a spike in
oil prices, Saudi Arabia would increase production very
quickly."
"And there's been strong economic data -- note the ISM
number out of the United States."
The U.S. manufacturing sector grew at its fastest pace in
nearly seven years in January, and signs of inflation jumped
more than expected, a further signal the economic recovery is
gaining traction. []
MOMENTUM
Manufacturing activity in the euro zone accelerated more
than previously thought in January, indicating the sector is
regaining momentum across most of the region, with the notable
exception of Greece, a survey showed. []
Parker also pointed to "strong corporate earnings numbers".
Among banks to gain were Spain's BBVA <BBVA.MC> and Banco
Santander <SAN.MC>, up 3.8 and 2 percent respectively, ahead of
results on Wednesday and Thursday.
"Our view is that Europe will muddle through the crisis,"
said Parker, also noting the reduced spread between Spanish and
German bonds.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC40 <> rose between 1.6 and 1.7
percent.
Wall Street was higher around the time European bourses were
closing. The Dow Jones <>, S&P 500 <.SPX> and Nasdaq
Composite <> were up between 0.7 and 1.4 percent, with
drugmaker Pfizer <PFE.N> up more than 5 percent after results.
TOP TECHS
Technology stocks featured among the top performers, with
enterprise search software maker Autonomy jumping 6.3 percent
after sales came in slightly above expectations. []
German chipmaker Infineon gained 1.7 percent after it raised
its full-year outlook, while British chip designer ARM <ARM.L>
whose architecture is licensed to Infineon, rose 6.1 percent
after forecast-beating fourth-quarter profits. []
Miners gained for the second session as confidence improved
about the global recovery and the outlook for metals.
Sentiment in the sector was boosted after HSBC's China
Purchasing Managers Index reported a rise in January, showing
solid growth in the country's vast manufacturing sector.
[]
The STOXX Europe 600 Basic Resources <.SXPP> gained 2.2
percent, with Antofagasta <ANTO.L>, Fresnillo <FRES.L> and
Kazakhmys <KAZ.L> up between 4.7 and 6.8 percent.
On the downside, bearings maker SKF <SKFb.ST>, a bellwether
for manufacturing, fell 7.9 percent after saying it faced
headwinds due to currency rates and higher raw material costs.
[]
Analysts said the FTSEurofirst 300 index could be due for a
correction after two straight months of gains. "A correction of
5 to 8 percent can actually be quite healthy for a bull market,"
Joshua Raymond, market strategist at City Index, said.
(Additional reporting by Harpreet Bhal; Editing by David
Hulmes)
