Banks power Europe stocks to biggest monthly rise

                                
 (As major continental European markets are closed for the May
day holiday on Friday, Reuters will not publish a separate
pan-European stock report. The British equity market report will
serve as the pan-European report. Normal European reports will
resume on Monday.)
                                
 
                                
 * FTSEurofirst 300 closes 1.5 pct higher
                                
 * Benchmark records biggest-ever monthly rise
                                
 * Banks, insurance stocks surge
                                
 
                                
 By Atul Prakash
                                
 LONDON, April 30 (Reuters) - European equities ended higher
on Thursday, with a key benchmark posting its biggest-ever
monthly gain, driven by stronger-than-expected company earnings
and on optimism that the market was bottoming out.
                                
 Investors shrugged off the World Health Organization's
warning that a swine flu pandemic was imminent, and analysts
said that the health crisis might pass without having any
significant impact on the economy.
                                
 Pharmaceutical stocks gained on hopes that the demand for
medicines and vaccines would rise. The new H1N1 strain is
spreading around the world and 12 countries have so far reported
cases of the flu, which has killed up to 176 people in Mexico.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
closed 1.5 percent higher at 828.62 points after hitting its
highest since mid-January. The index, which fell 45 percent last
year, rose 13 percent in April, its biggest ever monthly rise.
                                
 Banks added the most points to the index, with Barclays
<BARC.L> surging 9.8 percent, Royal Bank of Scotland <RBS.L>
climbing 13.6 percent, Societe Generale <SOGN.PA> up 7.9
percent, AXA <AXAF.PA> jumping 10 percent and Lloyds <LLOY.L>
rising 8.2 percent.
                                
 "The market is gradually becoming more confident with the
idea that we are pretty close to the trough," said Andrew Bell,
head of research at Rensburg Sheppards.
                                
 "The feeling is that you have gone through a period of the
economy shrinking at 6-7 percent and now you might enter into a
period when it is shrinking at a smaller rate, or even in three
to six months starting to stagnate, or even a bit better."
                                
 Investors were reassured by comments from the U.S. Federal
Reserve, which said the economic outlook had improved modestly
since its last meeting in March. U.S. GDP data, although grim,
showed consumer spending rose, while the number of workers
filing new claims for jobless aid unexpectedly fell last week.
                                
 Drugmakers were among top gainers, with GlaxoSmithKline
<GSK.L> rising 1 percent, Novartis <NOVN.VX> up 1.6 percent and
Sanofi-Aventis <SASY.PA> rising 0.9 percent.
                                
 AstraZeneca <AZN.L> beat expectations with a 40 percent rise
in first-quarter pretax profit, bolstered by higher revenues
from heart drugs Toprol XL and Crestor. But its shares closed
2.4 percent lower after rising earlier in the session.
                                
 
                                
 BETTER-THAN-EXPECTED RESULTS
                                
 BASF <BASF.DE>, the world's largest chemical maker, jumped
more than 7 percent after its first-quarter operating profit
beat forecasts, as a good start to the growing season in Europe
and the United States boosted its pesticides business.
                                
 "This is not a technical rebound but a clear rally. It's a
real change in trend; the bear market is behind us," said
Francois Chevallier, strategist at Banque Leonardo, in Paris.
                                
 But some analysts advised caution and said the market was
not out of the woods yet, as a worsening of the flu outbreak or
negative corporate news might again scare investors.
                                
 Mexican President Felipe Calderon told his people to stay
home from Friday for a five-day partial shutdown of the economy,
after the World Health Organisation raised its alert level to
phase 5, the last step before a pandemic. [ID:nN29472619]
                                
 "So far, the flu outbreak is limited, and maybe investors
see the fact that the WHO has raised its alert level as a sign
that authorities are aggressively acting to limit the spread of
the virus," said Valerie Plagnol, chief strategist at CM-CIC
Securities, in Paris.
"We've had the SARS outbreak and the avian flu outbreak.
This time, the market is waiting to see if it will really be a
pandemic".
                                
 The market also took a note of news that Chrysler will
proceed with Chapter 11 bankruptcy protection to complete its
restructuring after attempts to reach concessions with lenders
faltered, an administration official said. [ID:nN30510731]
                                
 Miners tracked higher metals prices, with BHP Billiton
<BLT.L>, Anglo American <AAL.L>, Antofagasta <ANTO.L>, Rio Tinto
<RIO.L> and Xstrata <STA.L> rising 2.1-6.7 percent.
                                
 Across Europe, the FTSE 100 <.FTSE> index, Germany's DAX
<.GDAXI> and France's CAC 40 <.FCHI> rose 1.3-1.4 percent.
                                
(Additional reporting by Blaise Robinson; editing by John
Stonestreet)