Europe shares end up ahead of U.S. rescue plan vote

                                
 * FTSEurofirst 300 closes 0.9 pct higher
                                
 * Banks gain ahead of vote on $700 billion rescue package
                                
 * Commodities slip; track weaker metals, crude prices
                                
 
                                
 By Atul Prakash
                                
 LONDON, Oct 1 (Reuters) - European shares ended higher on
Wednesday ahead of a crucial vote by the U.S. Senate on a
revised $700 billion financial sector bailout plan, but economic
data painted a bleak picture for the global economy.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
closed 0.9 percent higher at 1,072.64 points. The benchmark has
lost about 29 percent so far this year.
                                
 Banks added most points to the index after recouping some of
their recent losses made on uncertainty over the U.S. rescue
package. But commodities stocks slipped, tracking a sharp
decline in metals and oil prices.
                                
 Among banks, Dexia <DEXI.BR> advanced 9.7 percent, Lloyds
TSB <LLOY.L> jumped 10.4 percent and Barclays <BARC.L> added
more than 4.4 percent.
                                
 HBOS <HBOS.L> surged 21 percent after a person close to
Standard Life Investments, a top investor in Lloyds and HBOS,
said the investment firm supported the planned takeover of HBOS
by Lloyds under the terms originally announced. [ID:nL1726110].
                                
 Fortis <FOR.BR> gained 13.7 percent. The Belgian bank,
partly nationalised this week, scrapped $4 billion of asset
sales just as top Italian and Icelandic banks said they will
sell assets to bolster defences as a credit crisis reverberates
among Europe's banks. [ID:nSP194127]
                                
 But investors remained cautious as the U.S. Senate prepared
to vote on the revised plan aimed at halting the worst financial
crisis since the Great Depression.
                                
 "The plan is very important as it may put a floor under the
credit markets, and may bring in private money of the same
magnitude," said Philippe Gijsels, strategist at Fortis.
                                
 "(But) I see no reason to give up our cautious view -- I
would rather give up 10 percent upside from the bottom and get
in when it's clear things are working out."
                                
 While the financial sector's outlook remained uncertain, a
raft of economic data pointed to difficult times ahead.
                                
 Factory activity in the euro area showed the fourth straight
month of contraction in September, Britain's manufacturing
sector put in its worst performance in at least 16-1/2 years and
in Japan, the closely watched Tankan index of manufacturing
turned negative for the first time since 2003.
                                
 The UK Purchasing Managers' Index fell to the lowest in the
history of a survey that started in 1992, fanning fears that
Britain has entered its first recession since the early 1990s.
                                
 U.S. factory activity contracted for a second month in
September, while employment in the sector fell, according to a
report by the Institute for Supply Management (ISM).
                                
 "The ISM was weak and confirms the view that economies
across the world are slowing rapidly, and the crisis in the
financial sector is impacting the real economy," Gijsels said.
                                
 
                                
 COMMODITIES WEAKEN 
                                
 Miners lost ground as copper prices fell more than 3 percent
and aluminium dropped over 1 percent. Other metals also fell.
                                
 Anglo-Swiss miner Xstrata <XTA.L> fell 1.9 percent. The
company dropped immediate plans for a $10 billion bid for No. 3
platinum producer Lonmin <LMI.L> but set the scene for a later
deal by scooping up Lonmin shares, which plunged 20 percent.
                                
 But BHP Billiton's <BLT.L> proposed $114 billion hostile bid
for Rio Tinto <RIO.L> was cleared by Australia's competition
watchdog, moving a step closer to clinching a deal first
announced almost a year ago. [ID:nSYD226247]
                                
 BHP Billiton <BLT.L> was down nearly 4 percent, while Rio
Tinto <RIO.L> gained 0.5 percent. Anglo American <AAL.L>,
Vedanta Resources <VED.L>, Kazakhmys <KAZ.L> and Antofagasta
<ANTO.L> fell between 0.4 and 10.2 percent.
                                
 Energy shares also dropped with a 2 percent decline in crude
prices. Gas producer BG Group <BG.L> lost 0.4 percent and Tullow
Oil <TLW.L> shed 0.3 percent.
                                
 Automaker Porsche <PSHG_p.DE> fell 8.5 percent after it
reported that full fiscal-year revenue and unit sales stagnated
at its core sports car business.
                                
 Across Europe, the FTSE 100 <.FTSE> index closed 1.2 percent
higher, Germany's DAX was down 0.4 percent and France's CAC 40
added 0.6 percent .
 (Additional reporting by Sitaraman Shankar; Editing by Quentin
Bryar)