Europe shares rise to highest close since April

                                
 * FTSEurofirst 300 up 0.6 pct, hits 4-1/2-month closing high
                                
 * Financials surge following Basel rules on bank capital
                                
 * Miners advance on encouraging Chinese factory data
                                
 
                                
 By Brian Gorman
                                
 LONDON, Sept 13 (Reuters) - European shares hit their
highest close since April on Monday, as banks surged on relief
that new capital rules were not more demanding, and miners rose
with metals prices as Chinese data prompted optimism.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
rose 0.6 percent to 1,087.97 points, the highest close in more
than four months.
                                
 New capital requirements, known as Basel III, will demand
banks hold top-quality capital totalling 7 percent, against the
present requirement of 2 percent, of their risk-bearing assets
but a long lead-in time eased fears that lenders will have to
rush to raise capital.
                                
 Banks to gain included Credit Agricole <CAGR.PA>, Societe
Generale <SOGN.PA> and UniCredit <CRDI.MI>, up between 2.9 and
5.8 percent.
                                
 Apart from the banks, "good numbers out of China, and M&A
kicking off," were driving the market higher, said Andy Lynch,
fund manager at Schroders. "There are a lot of good reasons out
there."
                                
 The European benchmark is up more than 68 percent from the
lifetime low of March, 2009. Lynch said quantitative easing had
been a major factor in boosting shares. He said the ECB may need
to put interest rates "but that will be a 2011 story rather than
a 2010 story."
                                
 Analysts said the Basel III announcement was a relief,
though some urged caution.
                                
 "I don't think the troubles are over because obviously if
loan losses worsen again, then more banks could still find that
they need to raise capital. But at least people now know what
the requirements would be," said Felicity Smith, fund manager at
Bedlam Asset Management.
                                
 On the downside, Germany's Deutsche Postbank <DPBGn.DE>
slumped 7.8 percent after Deutsche Bank <DBKGn.DE> said on
Sunday it would offer to buy the rest of Postbank for 24-25
euros a share, below Friday's closing price of 27.035 euros.
                                
 Deutsche Bank Chief Executive Josef Ackermann said it needs
7.7 billion euros ($9.9 billion) to absorb Deutsche Postbank,
Germany's largest retail bank by clients. [ID:nLDE68C0EO]
                                
 
                                
 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
                                
 European banks' ROE and Tier 1 capital ratios:
 http://graphics.thomsonreuters.com/F/08/EZ_T1ROE0810.gif
                                
 European bank capital raising by country and issuer:
 http://r.reuters.com/cyw42p
                                
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 
                                
 MINERS GAIN
                                
 Copper prices rose on Monday, supported by
stronger-than-expected Chinese industrial output and retail
sales numbers, suggesting the world's second-largest economy was
accelerating once more. 
                                
 Miners to gain included Anglo American <AAL.L>, Antofagasta
<ANTO.L>, BHP Billiton <BLT.L>, Kazakhmys <KAZ.L>, Vedanta
<VED.L> and Xstrata <XTA.L>, up between 2.5 and 5.2 percent.
                                
 The market also got some support from a forecast by the
European Commission which said the euro zone economy is likely
to grow almost twice as fast this year as previously thought,
mainly because of much stronger growth in its biggest economy,
Germany. [ID:nLDE68C0KA]
                                
 Across Europe, Britain's FTSE 100 <.FTSE> ended the day 1.2
percent higher, Germany's DAX <.GDAXI> and France's CAC40
<.FCHI> rose 0.8 and 1.1 percent respectively.
                                
 The Euro STOXX 50 <.STOXX50E>, the euro zone's blue-chip
index, rose 0.9 percent to 2,805.06 points, just below the 61.8
percent Fibonacci retracement of its fall to a May low from an
April high.
                                
 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 0.8 and 1.7 percent. Banks,
such as JP Morgan <JPM.N>, were among the major gainers.
                                
 Among other individual European shares, Swiss Re <RUKN.VX>,
the world's second-largest reinsurer, rose 3.9 percent after
saying it may return money to shareholders via buybacks or
dividends after repaying a 3 billion Swiss franc ($2.96 billion)
convertible loan from Hathaway <BRKa.N>.
                                
 Primark owner Associated British Foods <ABF.L> fell 1.5
percent as it warned sales growth over the summer slowed at its
fashion discount retailer and margins will fall next year due to
higher cotton costs and taxes.
 (Additional reporting by Atul Prakash; Editing by Jon
Loades-Carter)