* FTSEurofirst 300 closes 1.5 percent higher
* Oils gain as crude tops $75; miners also stronger
* Banking shares bounce back
By Brian Gorman
LONDON, Dec 21 (Reuters) European equities closed sharply
higher on Monday, with energy shares gaining strength from
higher crude prices as cold weather gripped both sides of the
Atlantic, and banks recovering from recent losses.
At the start of a week shortened by the Christmas holiday,
the pan-European FTSEurofirst 300 index <> rose 1.5
percent to close at 1,027.87 points, having fallen in the
previous two sessions.
The index is up more than 59 percent from the lifetime low
it hit in early March, with several major economies having come
out of recession.
Energy shares rose as crude added to Friday's gains. Crude
for February <CLc2> rose 0.7 percent to around $75 a barrel, as
cold weather gripped both Europe and the United States, though
prices retreated in late afternoon trade, as the dollar rose.
BP <BP.L>, Royal Dutch Shell <RDSa.L>, Repsol <REP.MC>, ENI
<ENI.MI>, Total <TOTF.PA> and StatoilHydro <STL.OL> rose between
1.8 and 3 percent.
Cairn Energy <CNE.L> rose 4.7 percent after the explorer
said it secured a rig to allow it to commence a drilling
programme offshore western Greenland.
"People who have missed the rally, such as German insurance
companies, are trying to get into the market," said Heino
Ruland, strategist at Ruland Research, in Frankfurt.
He added: "Some of the laggard fund managers need to put
more equity in their portfolios. Some of us missed the boat.
"There's no news out (today) that would justify this sort of
rise, and it's on low volume. I think the rally will go further.
The economic recovery in the third quarter was strong, and it
will also be in the fourth quarter."
Banking stocks bounced back after slipping in previous
sessions on concerns over stricter capital regulations,
BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Barclays
<BARC.L>, Credit Suisse <CSFGN.VX>, HSBC <HSBA.L> Societe
Generale <SOGN.PA>, Standard Chartered <STAN.L> and UBS
<UBSN.VX> rose between 1.6 and 3.3 percent.
Deutsche Bank, however, said in a report the banking sector
would underperform in 2010, given the more restrictive
regulatory environment.
"If economic recovery continues in 2010, the next phase in
the cycle is to look for growth. The regulatory changes proposed
by Basel are not sufficient to destabilise the system. But they
are sufficient to drive growth out of the sector," it said.
Across Europe, Britain's FTSE 100 index <> ended the
day 1.9 percent higher; Germany's DAX <> and France's CAC
40 <> rose 1.7 and 2.1 percent respectively.
Wall Street was higher around the time European bourses were
closing. The Dow Jones <>, S&P 500 <.SPX> and Nasdaq
Composite <> were up between 1 and 1.2 percent. Aluminium
producer Alcoa rose 9.5 percent after announcing a joint venture
to build an aluminium complex in Saudi Arabia, and on a Morgan
Stanley upgrade. Norwegian aluminium producer Norsk Hydro
<NHY.OL> rose 5.6 percent.
MINERS RISE
Miners got strength from stronger base metals prices,
including copper <MCU3>.
BHP Billiton <BLT.L>, Anglo American <AAL.L>, Rio Tinto
<RIO.L>, Lonmin <LMI.L> and Xstrata <XTA.L> rose between 1.4 and
3.4 percent.
Among individual stocks, Actelion <ATLN.VX> dropped 3.9
percent after Europe's biggest biotech company said its
almorexant insomnia drug had unspecified safety problems in a
late-stage trial, even though it met its main target.
[]
Safran <SAF.PA> rose 4.5 percent after its aero-engines
joint venture with General Electric <GE.N> won a multi-billion
dollar deal to supply engines for China's future C919 plane
[]
(Additional reporting by Atul Prakash; Editing by Rupert
Winchester)
