* FTSEurofirst 300 up 2.1 pct, highest close in over a year
* Banks gain after JPMorgan results
* Commodities rise tracking crude, metals
* For Europe's sector performance, click on []
By Joanne Frearson
LONDON, Oct 14 (Reuters) - European shares surged to their
highest closing level in more than a year on Wednesday as a
surge in quarterly profits at JPMorgan <JPM.N> boosted
sentiment, with banks and commodity stocks the biggest gainers.
The FTSEurofirst 300 <> index of top European shares
closed up 2.1 percent at 1,016.24 points after earlier touching
a high of 1,017.75 points.
The benchmark index is up 57 percent since reaching a
lifetime low on March 9 and is up 22 percent for the year, but
down 38 percent from its mid-2007 peak.
"We are going into a very positive earnings season. So far
we have seen this, with Intel <INTC.O> and JPMorgan. These are
encouraging signs for the economy. It is not a time to desert
equities" said David Buik, partner at BGC Partners in London.
Intel's quarterly outlook and results soared past
expectations late Tuesday, fueling optimism over a tech sector
recovery before the crucial holiday season. []
Investor sentiment was also lifted after JPMorgan reported
sharply higher third-quarter results, topping Wall Street
expectations. []
Banks added the most points to the European index. HSBC
<HSBA.L>, Banco Santander <SAN.MC>, Barclays <BARC.L> and UBS
<UBSN.VX> were up 2.7 to 6.6 percent.
Commodity stocks featured among the biggest performers on
the index as crude <CLc1> rose 1.1 percent. BG Group <BG.L>, BP
<BP.L>, Cairn Energy <CNE.L> and Total <TOTF.PA> gained 2.2 to
8.6 percent.
MINERS IN DEMAND
Miners were in demand as copper <MCU3=LX> rose 1.7 percent.
The sector was also given a boost as Rio Tinto <RIO.L> raised
its production guidance for iron ore this year by between 5 and
7.5 percent to 210 million to 215 million tonnes, after
reporting a 12 percent jump in third-quarter output.
Rio Tinto was up 5.3 percent. Anglo American <AAL.L>,
Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Eurasian Natural
Resources <ENRC.L> and Xstrata <XTA.L> rose 3.4 to 7.7 percent.
Chemical stocks were on the rise. German BASF <BASF.DE>, the
world's largest chemical maker, gained 7.4 percent after it
surprised markets with forecast-beating third-quarter results,
some two weeks ahead of schedule. []
"(This is) clearly a positive surprise, confirms our view
that Q3 reporting for the chemical industry could be better than
consensus so far," a trader said.
German engineering company Siemens <SIEGn.DE> advanced 5.2
percent with traders citing speculation that the company may
hike its guidance. Siemens declined to comment.
Investor sentiment was also lifted after sales at U.S.
retailers fell in September, but rose excluding motor vehicles
for a second straight month in September, raising cautious
optimism consumer spending could support the economic recovery.
[]
On the downside, Diageo <DGE.L>, the world's biggest spirits
group, fell 2.1 percent after hitting an eight-week low. The
company said underlying quaterly sales fell 6 percent.
Its French peer Pernod Ricard <PERP.PA> was 3.5 percent
lower following the numbers and Exane analysts downgrade Pernod
to "underperform" from "neutral".
Across Europe, the FTSE 100 <> index was up 2 percent,
Germany's DAX <> gained 2.5 percent and France's CAC 40
<> was 2.1 percent higher.
