* FTSEurofirst 300 index up 0.5 percent
* Upbeat outlook for U.S. economy helps sentiment
* Luxottica rises; sees strong demand
* For up-to-the minute market news, click on []
By Harpreet Bhal
LONDON, March 1 (Reuters) - European shares rose on Tuesday,
starting the month on a stronger footing, with sentiment boosted
by growing optimism over the outlook for the U.S. economy as
investors snapped-up stocks beaten down in the recent sell-off.
By 0959 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was up 0.5 percent at 1,174.49 points, after
closing 0.8 percent higher on Monday.
Sentiment towards equities was helped by bullish comments
from billionaire investor Warren Buffett who said that he saw
the need for "major acquisitions", a sign stocks may be cheap,
and gave aggressive earnings forecasts for his Berkshire
Hathaway <BRKa.N> collection of businesses. []
The bullish comments, along with an upbeat assessment of the
economy by U.S. Federal Reserve official James Bullard, helped
U.S. stocks post gains on Monday.
"It's very important that the U.S. economy is now showing
signs of strength ... and forecasts for this year's GDP are
starting to exceed 4 percent. This is certainly good news for
the world economy," said Heino Ruland, strategist at Ruland
Research in Frankfurt.
Automakers rose, with a positive buzz surrounding the sector
as carmakers gathered this week for the Geneva auto show.
[]
Volkswagen <VOWG.DE> rose 1.8 percent after it said it was
acquiring a 8.18 percent stake in carbon products manufacturer
SGL Carbon <SGCG.DE>, which gained 6.6 percent. []
Within the sector, BMW <BMWG.DE>, Daimler <DAIGn.DE> and
Peugeot <PEUP.PA> added 2 to 3.2 percent.
Individual gainers included Luxottica <LUX.MI>, which rose
3.6 percent after the world's biggest premium eyewear said late
on Monday that it expected demand from the U.S. and emerging
markets to help profit growth to exceed sales this year.
[]
Heavyweight mining shares were also higher, with the STOXX
Europe 600 basic resources index <.SXPP> up 1.3 percent,
rebounding from two straight weeks of falls.
CONSOLIDATION TRIGGER
The FTSEurofirst index was on track to rise for the third
straight session, rebounding from a sharp sell-off on concerns
over soaring energy prices as political unrest swept across
parts of oil producing region of the Middle East and North
Africa.
"The consolidation was expected because markets were
overbought and we were now oversold for a short period of time
and this formed the basis for the bull market trend to resume,"
said Ruland.
On the economic front, the euro zone's manufacturing sector
expanded at its fastest pace in nearly 10 years in February, the
Markit Eurozone Manufacturing Purchasing Managers' Index (PMI)
showed, but a rise in prices at their quickest rate in at least
14 years is likely to cause a headache for policymakers.
A separate piece of data showed the EU Commission forecasts
2011 euro zone gross domestic product growth at 1.6 percent,
against 1.5 percent previously. []
Investors will watch a testimony by Federal Reserve Chairman
Ben Bernanke at 1500 GMT, where he is expected to remain
cautious about the economy signalling the U.S. central bank is
unlikely to cut short its $600 billion stimulus package.
"Inflation seems to be less of a problem in the U.S. and
Bernanke is focused on the two main factors for the U.S. economy
-- unemployment and housing -- and there is very little room to
manoeuvre until we start to see any significant improvements
there," a London-based trader said.
On the downside, Kingfisher <KGF.L> was among the biggest
fallers in Europe, down 3 percent after broker Societe Generale
downgraded its rating for the British home improvement retailer
to "sell" from "hold", saying its B&Q business faces more severe
consumer headwinds.
(Reporting by Harpreet Bhal; Editing by Hans Peters)
