European shares hit 14-month closing high

                                
 * FTSEurofirst 300 ends up 0.7 pct
                                
 * Energy stocks up, OPEC to keep output targets unchanged
                                
* Greek and Irish banks soar
                                
    
                                
 By Brian Gorman
                                
 LONDON, Dec 22 (Reuters) - European shares rose to their
highest close in 14 months on Tuesday, with energy stocks
gaining and U.S. home sales data boosting sentiment.
                                
 In thin trade ahead of the Christmas holiday season, the
FTSEurofirst 300 <.FTEU3> index of top European shares rose 0.7
percent to 1,034.86 points, its highest close since Oct. 3,
2008.
                                
 Energy shares were among the biggest gainers, even as crude
prices fell to about $73.40 a barrel, after OPEC oil producers
agreed to leave output targets unchanged. [ID:nLDE5BL09K]
                                
 Heavyweights BP <BP.L>, Royal Dutch Shell <RDSa.AS> and
Total <TOTF.PA> rose between 1.1 and 1.7 percent.
                                
 Cairn Energy <CNE.L> rose 6.3 percent, building on gains
from Monday when it said it had secured a rig to drill offshore
Greenland. The company also undertook a 10-for-1 stock split on
Tuesday. 
                                
 The European benchmark has gained more than 24 percent this
year and is up more than 60 percent from its lifetime low of
March 9, as several major economies have come out of recession.
                                
 Volumes were thin at 57.9 percent of the 90-day average.
                                
 U.S. economic data helped, as investors chose to focus on
stronger-than-expected home sales, rather than
weaker-than-expected GDP. [ID:nN22392364]
                                
 Sales of previously owned homes in the United States surged
last month as prices continued to fall and buyers rushed to take
advantage of a popular tax credit, the National Association of
Realtors (NAR) said. 
                                
 The U.S. economy grew at a much slower pace than initially
thought in the third quarter. The Commerce Department's final
estimate showed gross domestic product grew at a 2.2 percent
annual rate instead of the 2.8 percent pace it reported last
month. [ID:nN21231124]
                                
 "The focus was on the homes data, which was much stronger
than expected," said Philippe Gijsels, senior equity strategist
at Fortis Bank in Brussels. "And the GDP is likely to be
stronger in Q4."
                                
 "But there's also some window dressing going on, as we come
up to the end of the year. Some fund mangers are playing catch
up.
                                
 "Markets will be well supported for the next few days. For
2010, I'm much less positive as I believe markets have already
discounted too much of a recovery. And central banks can't keep
interest rates at zero forever."
                                
 
                                
 IRISH, GREEK BANKS GAIN
                                
 Banks rose with those in Greece and Ireland enjoying
spectacular gains.
                                
 Allied Irish Banks <ALBK.I> and Bank Of Ireland <BKIR.I>
soared 17.9 and 12.1 percent respectively, recovering from falls
on Monday when some investors reacted negatively to comments
about the extent of state ownership.
                                
 Greek banks gained after Moody's lowered its rating on the
country's sovereign debt by one notch to A2, a downgrade that
was better than expected. [ID:nATH005068]
                                
 Greece's four biggest lenders -- National Bank <NBGr.AT>,
EFG Eurobank <EFGr.AT>, Alpha Bank <ACBr.AT> and Piraeus Bank
<BOPr.AT> -- rose between 3.3 and 8.8 percent.
                                
 Drugmakers also featured among the top gainers. The sector
has been among the weakest in 2009, with the DJ STOXX European
healthcare index <.SXDP> up only 37.3 percent from the March
low.
                                
 AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L>, Novartis
<NOVN.VX>, Roche <ROG.VX> and Sanofi-Aventis <SASY.PA> rose
between 1.1 and 1.9 percent.
                                
 Across Europe, Britain's FTSE 100 index <.FTSE> and France's
CAC 40 <.FCHI> both ended the day 0.7 percent higher. Germany's
DAX <.GDAXI> rose 0.3 percent.
                                
 The UK economy was confirmed as having still been in
recession in the third quarter, though the final GDP reading
showed a 0.2 percent contraction, compared with the previous
estimate of 0.3 percent. 
                                
 Wall Street was higher around the time European bourses were
closing. The Dow Jones <.DJI>, S&P 500 <.SPX> and Nasdaq
Composite <.IXIC> were up between 0.2 and 0.3 percent.
 (Additional reporting by Christoph Steitz; Editing by David
Cowell)