* FTSEurofirst 300 index close up 0.5 percent
* Commodity stocks gain tracking crude, metals
* Roche up on positive Phase II data
By Joanne Frearson
LONDON, Sept 22 (Reuters) - European shares closed higher on
Tuesday, snapping a two-day losing streak as a stronger
commodity sector tracked firmer crude and metals prices that
were supported by a weaker dollar.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 0.5 percent at 1,004.41 points. The European
index has rallied nearly 56 percent since hitting a low in March
and is up around 18 percent this quarter, on track to post its
best quarterly rise in almost a decade.
"A fairly positive tone to the day. I think it is a general
notion that the recession is over and the economy is only going
to improve from here," said Peter Dixon, economist at
Commerzbank.
U.S. Treasury Secretary Timothy Geithner said the U.S.
economy appeared to be gathering steam and G20 leaders meeting
in Pittsburgh this week would strive to ensure the recovery was
balanced. []
"But there is a growing sense we are getting a bit ahead of
ourselves. We have had a pause in recent days ... and I expect
the trend over the next few days is going to be flat," Dixon
said.
Energy stocks added most points to the index as oil rose
above $71 a barrel, recovering from a sharp fall the previous
day. BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total <TOTF.PA>
were 0.7 to 0.9 percent higher.
Miners tracked metals prices higher, with copper <MCU3=LX>
and nickel <MNI3=LX> up 1.6 and 3.9 percent, respectively.
Eurasian Natural Resources Corporation <ENRC.L>, Rio Tinto
<RIO.L> and Xstrata <XTA.L> rose between 1.1 to 4.4 percent.
DRUGMAKERS IN DEMAND
Drugmakers, which have lagged behind the rally and offer
relatively higher and steadier yields, were also in demand.
Roche <ROG.VX> gained 1.4 percent after Phase II data showed
that Avastin, which has already been shown to help patients with
brain cancer stay alive longer without their condition
worsening, may also improve their daily lives. []
Banks found favour, with Credit Suisse <CSGN.VX> gaining
nearly 3 percent. The Swiss group is confident it can keep
private banking margins between 110 to 120 basis points over the
long term and expects average annual net new money growth of 6
percent. []
Banco Santander <SAN.MC>, Credit Agricole <CAGR.PA> and
Deutsche Bank <DBKGn.DE> were up 0.7 to 1.7 percent.
Looking ahead, investors will look closely at the outcome of
the two-day Federal Reserve policy meeting which ends on
Wednesday. Economists expect the FOMC to hold the target range
for interest rates steady at zero to 0.25 percent.
With steering the global economy out of recession the key
focus for the G20 leaders meeting in Pittsburgh on Thursday and
Friday, markets will be looking for any comment indicating the
Fed might wind back its stimulus measures given improving
macroeconomic data.
"The issue of "exit strategies" is likely to remain key for
policymakers globally, at this week's G20 summit and beyond. It
is the outlook for subdued inflation that gives the necessary
breathing space for policy support to be withdrawn cautiously,"
Barclays Wealth said in a note.
Across Europe, Britain's FTSE 100 <> advanced 0.2
percent, Germany's DAX <> rose 0.7 percent and France's
CAC 40 <> put on 0.3 percent.
(Additional reporting by Dominic Lau; editing by John
Stonestreet)
