Dubai news helps Europe shares to one-week high

                                
 * FTSEurofirst 300 up 0.8 pct; hits 1-week closing high
                                
 * Financials among top gainers; Dubai news boosts
                                
 * Energy shares up on merger & acquisition news
                                
 By Atul Prakash
                                
 LONDON, Dec 14 (Reuters) - Abu Dhabi's move to provide $10
billion in aid to Dubai World lifted financial shares and pushed
European stocks to a third straight session of gains on Monday.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended 0.8 percent higher at 1,018.29 points, the highest close
since Dec 7. The benchmark index is up 22 percent this year and
has surged 57 percent since hitting a record low in early March.
                                
 Banks were among the top gainers, with Standard Chartered
<STAN.L>, HSBC <HSBA.L>, Barclays <BARC.L>, Royal Bank of
Scotland <RBS.L>, BNP Paribas <BNPP.PA>, Societe Generale
<SOGN.PA> and Credit Agricole <CAGR.PA> rising between 0.9
percent and 4.3 percent.
                                
 Deutsche Bank <DBKGn.DE> jumped 3.4 percent as it set its
sights on achieving record pretax profit of approximately 10
billion euros ($14.7 billion) from its operating businesses in
2011 [ID:nLDE5BD1ZU]
                                
 "Certainly the Dubai news is helping the banking sector.
Basically it's something that brings some relief to the sector
that has been underperforming over the last weeks," said Gerhard
Schwarz, head of global equity strategy at UniCredit in Munich.
                                
 "Sentiment is still cautious because a lot of investors are
very wary of what could go still go wrong."
                                
 Dubai said $4.1 billion of the money received from Abu Dhabi
was allocated to property developer Nakheel to repay its Islamic
bond maturing on Monday. 
                                
 The excess funds would be used to help government-controlled
holding company Dubai World, which has asked creditors to agree
to restructure $26 billion of its debt, up until the end of
April 2010, a Dubai government statement said. [ID:nLDE5BD01S]
                                
 The market was also helped by Citigroup's <C.N> plan to
repay the money it owes the U.S. government, including issuing
$17 billion of stock immediately, as the bank looks to end the
executive pay restrictions that came with the bailout.
[ID:nN14173715]
                                
 Lloyds <LLOY.L>, however, fell 1.9 percent after It
completed a record 13.5 billion pound ($21.9 billion) rights
issue which ended a turbulent period for the bank and shifted
investor focus to a potential government stake sale in 2010.
                                
 
                                
 M&A NEWS BOOSTS ENERGY
                                
 Energy shares gained ground on news that Exxon Mobil Corp
<XOM.N> will buy XTO Energy Inc <XTO.N> in an all-stock deal
valued at about $30 billion, in a move that thrusts the U.S.
energy giant to the forefront of North America's fast-growing
natural gas industry. [ID:nN14126206]
                                
 BP <BP.L>, Royal Dutch Shell <RDSa.L>, BG Group <BG.L>,
Tullow Oil <TLW.L>, Repsol <REP.MC>, Total <TOTF.PA> and
StatoilHydro <STL.OL> added 0.6 to 3.2 percent.
                                
 Economic data also helped the market. The Bank of Japan
released its closely watched tankan survey of corporate
activity, showing the headline index for big manufacturers'
sentiment was minus 24 in December, improving from minus 33 in
the previous quarterly survey in September. [ID:nECB00925]
                                
 Analysts remained positive on the stock market's prospects.
                                
 "Overall, many of the factors that have driven equity
markets higher in 2009 remain in place -- loose monetary policy,
low yields on cash and governments bonds, attractive valuations
and cash on the sidelines waiting to be invested," said Mick
Gilligan, head of research at Killik & Co.
                                
 Cadbury <CBRY.L> was up 0.6 percent. It teased shareholders
with the prospect of rival bids and promised bigger dividends
and stronger growth as it again knocked back a 10 billion pound
($16.2 billion) offer from Kraft Foods <KFT.N>. [ID:nGEE5BA1YP]
                                
 French insurer AXA <AXAF.PA> rose 2.4 percent. Australia's
AMP Ltd <AMP.AX> and AXA raised their bid for AXA Asia Pacific
Holdings <AXA.AX> by 16 percent to $11.7 billion, giving the
takeover target a week to agree to the new bid.
                                
 Investor appetite for risky assets like equities was higher,
with the VDAX-NEW volatility index <.V1XI> falling 2.3 percent
to hover near a 15-month low. The lower the index, which is
based on sell and buy options on Frankfurt's top-30 stocks
<0#.GDAXI>, the higher the market's desire to take risk.
                                
 Across Europe, Britain's FTSE 100 index <.FTSE>, Germany's
DAX <.GDAXI> and France's CAC 40 <.FCHI> rose 0.7 to 1 percent.
 (Editing by David Cowell)