* FTSEurofirst 300 rises 3.2 pct after 5 session losses
* Barclays leads, surges 73 percent after update
* Energy shares gain tracking crude prices
By Atul Prakash
LONDON, Jan 26 (Reuters) - European shares jumped on Monday,
snapping a five-session losing streak, as a 73-percent surge in
British bank Barclays <BARC.L> boosted embattled financials,
while oil shares tracked firmer crude prices.
The FTSEurofirst 300 <> index of leading European
shares closed 3.2 percent higher at 784.66 points after falling
in 12 of the previous 13 sessions. The DJ Stoxx banks index
<.SX7P> rose 7 percent.
Financial stocks spiked, with Lloyds <LLOY.L> jumping 32
percent, ING <ING.AS> up 27.8 percent, Royal Bank of Scotland
<RBS.L> rising 19.8 percent, BNP Paribas <BNPP.PA> up 16.9
percent and Societe Generale <SOGN.PA> rising 11 percent.
Pfizer's <PFE.N> $68 billion acquisition of rival Wyeth
<WYE.N> also boosted sentiment, with analysts saying the move
opened the possibility of more deals as firms seek to position
themselves defensively in the midst of a faltering economy.
But analysts said the financial sector might continue to
struggle this quarter despite Monday's surge.
"There is company-specific reassurance coming out but given
the quantum of the mark-downs we saw last week -- things never
tend to go down in a straight line -- it was fair to anticipate
a rebound," said Jonathan Lawlor, head of European research,
Fox-Pitt, Kelton.
"The key question would be the extent to which we can hold
on to the rebound. And broadly speaking we remain cautious on
the banking sector ... not forgetting that we have to go through
year-end results," he added.
Europe's crisis-hit banks unveiled further job cuts and
billions of euros more in losses. ING said it faced a 2008 loss
of 1 billion euros, ousted its chief executive and cut 7,000
jobs, but news the Dutch government was guaranteeing assets on
more generous terms than expected boosted its stocks.
BNP Paribas <BNPP.PA>, France's top bank, said it expected
to post a fourth-quarter net loss of around 1.4 billion euros
($1.8 billion), but Barclays <BARC.L> said it had no need to
raise capital and remained profitable despite an 8 billion pound
($11 billion) 2008 writedown.
"The news about Barclays was certainly better than expected
and, to a certain extent, supports sentiment in the market,"
said Heinz-Gerd Sonnenschein, strategist at Postbank in Germany.
"It is good that banks come clean with their situation and
that is rewarded. However, a general all-clear for the market
cannot be given," he said.
OILS ADVANCE, PHILIPS GAINS
Oil shares gained tracking a 3 percent rise in crude prices.
BP <BP.L>, Royal Dutch Shell <RDSb.L>, BG Group <BG.L>, Tullow
Oil <TLW.L> and Total <TOTF.PA> added 4.2-9.6 percent.
Dutch electronics giant Philips Electronics <PHG.AS> rose
8.3 percent after posting its first quarterly loss since 2003
but saying it would accelerate its restructuring programme.
But despite Monday's gains in Europe stocks, market outlook
remained grim. A Group of 20 finance official told Reuters that
the International Monetary Fund had slashed its forecasts for
2009 global growth to 0.5 percent from 2.2 percent.
Adding to the gloom, Europe's second biggest steelmaker
Corus said it was cutting 3,500 jobs worldwide, mostly in
Britain, as it restructured to battle a global downturn in
demand from automotive and construction industries.
"The economic environment remains extremely fragile," said
Commerzbank strategist Hans-Juergen Delp.
"Companies such as Nokia and Microsoft have already been
battered and the negative sentiment is likely to return fast."
Among significant losers, Nokia <NOK1V.HE> fell 2.2 percent,
while pharmaceutical firm Sanofi Aventis <SASY.PA> dropped 1.9
percent as traders cited market talk it could bid for Dutch
vaccine maker Crucell NV <CRCL.AS>.
Across Europe, Britain's FTSE <>, Germany's DAX
<> and France's CAC <> rose 3.5-3.9 percent.
(Additional reporting by Christoph Steitz; Editing by Jon
Loades-Carter)
