* FTSEurofirst 300 up 0.25 percent
* Barclays, ING drive bounce in banks
* Defensive stocks struggle
By Sitaraman Shankar
LONDON, Jan 26 (Reuters) - European shares rose in early
trade on Monday, powered by Dutch financial group ING <ING.AS>,
which said it would tap into government guarantees, and Barclays
<BARC.L>, which said it did not need fresh funding.
At 0932 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.25 percent at 762.42 points after
falling in 12 of the past 13 sessions.
ING jumped 13 percent after saying it would tap into 22
billion euros of Dutch state loan guarantees for its troubled
loan portfolio, and that its chief executive was stepping down.
Barclays leapt 27 percent after it said it did not need to
raise fresh funds, and that it had seen a good start to 2009
with high customer activity.
HSBC <HSBA.L> added most points to the pan-European index,
trading 2.4 percent higher, while BNP Paribas <BNPP.PA> rose 6
percent after it said it saw a fourth-quarter loss of around 1.4
billion euros.
Bank stocks have slid 20 percent this year on funding
concerns and fears of nationalisation and, despite Monday's
bounce, analysts said that there was plenty of pain ahead.
"Though the Barclays statement is remarkably perky, banks
are still going to find themselves in difficulty and are moving
inexorably towards government control," said Justin Urquhart
Stewart, investment director at Seven Investment Management.
"This could be through a suspension of shares and a split
into clearing banks and separately capitalised investment
banks," he said.
Dutch electronics giant Philips Electronics <PHG.AS> rose
7.7 percent after it posted its first quarterly loss since 2003
but said it would accelerate its restructuring programme,
shedding about 6,000 jobs.
Across Europe, Britain's FTSE <> was up 0.7 percent,
Germany's DAX <> flat and France's CAC <> up 0.2
percent.
DEFENSIVES ON THE DEFENSIVE
Pharmaceutical, food, utility and telecom stocks, considered
relatively defensive in times of trouble, lost ground as
investors became more venturesome, with drug shares failing to
gain support from expectations that Pfizer Inc <PFE.N>, the
world's largest drugmaker, is poised to buy rival Wyeth.
Sanofi-Aventis <SASY.PA> lost 2.9 percent, GDF Suez <GSZ.PA>
slipped 1.9 percent, France Telecom <FTE.PA> fell 1.8 percent
and Nestle <NESN.VX> 0.8 percent.
The FTSEurofirst 300 is already down 9 percent so far this
year, driven by the big losses in bank shares, after losing 45
percent in 2008.
The index slid last year as a meltdown in risky U.S.
mortgages resulted in a credit market crisis and pushed major
economies into recession and crimped corporate earnings.
U.S. President Barack Obama's top economic adviser would not
rule out on Sunday that more funds could be needed to stabilise
the U.S. financial system as a deep recession increases banks'
losses.
Governments have been rolling out stimulus packages to help
limit the depth and duration of the recession, following the
efforts of their central banks, which have been hacking away at
interest rates.
Nomura said in a research note that a range of European
companies was set to benefit from government stimulus programmes
across the world.
It picked Siemens <SIEGn.DE> and ABB <ABBN.VX> as possible
gainers, and said that EDP <EDP.LS> and Iberdrola <IBE.MC> could
benefit from their exposure to renewables and spending on the
U.S. power grid.
(editing by John Stonestreet)
