* FTSEurofirst 300 closes 1.4 percent higher
* Oil heavyweights gain as crude prices rise
* Food and beverages stocks among top gainers
* Investors await Fed policy-setting meeting on Tuesday
By Brian Gorman
LONDON, Sept 20 (Reuters) - Optimism that the economy will
not slip back into recession lifted European shares on Monday
with oil heavyweights gaining following a jump in crude prices.
The FTSEurofirst 300 <> index of top European shares
rose 1.4 percent to close at 1,087.38 points. The index has
gained nearly 6 percent in September but is 2.5 percent below a
peak hit in April.
Energy companies such as Total <TOTF.PA>, ENI <ENI.MI>, BG
Group <BG.L> and Royal Dutch Shell <RDSa.L> rose 2.1-2.9 percent
as crude prices <CLc1> rose 2 percent to more than $75 a barrel
on expectations inventories may have fallen and helped by a
weaker dollar.
BP <BP.L> rose 2.1 percent after saying it had permanently
sealed the Gulf of Mexico oil well that caused the worst ever
U.S. oil spill.
"Markets have continued to focus on cyclical support. We
know that monetary policy is going to be extremely
accommodative," said Bill Dinning, head of strategy at Aegon
Asset Management in Edinburgh.
"It's when the market focuses on some of the hangovers like
European sovereign debt we have problems. For now I think the
cyclical is trumping the structural. But there's not a lot of
conviction. Getting out of that range marked by the highs of
April might be a challenge."
Gold hit a record high for the fourth day in succession.
Strategists expect interest rates to stay low and limit the
opportunity cost of holding gold. Randgold Resources <RRS.L>
rose 1.5 percent.
Food and beverages shares <.SX3P> were among the top
gainers. Suedzucker <SZUG.DE>, Europe's largest sugar maker,
rose 4.5 percent after it posted a 5 percent rise in first-half
revenue. Unilever <ULVR.L> rose 3 percent.
UK food retailers J Sainsbury <SBRY.L>, Wm Morrison
Supermarkets <MRW.L> and Tesco <TSCO.L> rose between 2.1 and 2.5
percent after analysts at Bernstein said the European food
retail sector re-rating has further to go as food inflation
continues to accelerate.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC40 <> rose between 1.4 and 1.8
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 1 and 1.1 percent.
SGS RISES
Testing and inspection services company SGS <SGSN.VX> rose
5.4 percent after the company said it is targeting sales of 8
billion Swiss francs ($7.9 billion) by 2014.
Some investors stayed cautious ahead of the U.S. Federal
Reserve's policy-setting meeting on Tuesday. Policymakers need
to decide if and when to launch further large-scale asset
purchases to support the sluggish recovery.
The Fed is expected to renew a promise to keep its portfolio
from shrinking but is not seen taking new steps to ease monetary
policy. []
"The Fed will try to reassure the market that there will be
sufficient liquidity. If you need to stimulate markets in the
current environment, you can do a lot of things, but you cannot
afford to cause a real deflationary cycle on assets again," said
Luc Van Hecka, chief economist at KBC Securities.
The emergency loan vehicle set up by euro zone countries to
contain the region's sovereign debt problems will probably not
need to be activated despite the steep rise in some bond
spreads, its chief executive said. []
(Additional reporting by Atul Prakash; Editing by David
Cowell)
