* FTSEurofirst 300 rises 0.3 pct
* Oil shares lead advance
* Investors count on likely ECB, BoE rate cuts this week
By Rebekah Curtis
LONDON, Nov 3 (Reuters) - European stocks rose early on
Monday, heading for a fifth straight day of gains as oil shares
climbed and investors cheered the prospect of likely rate cuts
in Europe this week.
At 0958 GMT the pan-European FTSEurofirst 300 index <>
was up 0.3 percent at 931.19 points, tracking gains in Asia
overnight and on Wall Street on Friday. But the index is down 38
percent this year, rattled by the ongoing financial crisis.
Commodities shares led the advance, in spite of a fresh dip
in the oil price <CLc1>. Shares in BP <BP.L>, Royal Dutch Shell
<RDSa.L> and Total <TOTF.PA> added between 0.9 and 1.6 percent.
Among miners, Kazakhmys <KAZ.L>, Xstrata <XTA.L> and Vedanta
Resources <VED.L> added between 7.7 and 12.4 percent as a weaker
dollar helped to lift gold prices.
The European Central Bank and the Bank of England are
expected to lower interest rates this week, following recent
rate cuts by China, India, Japan and the United States.
"Given the massive scale of the reflation efforts we now see
globally, be it in the form of rate cuts or fiscal packages, the
odds of a more durable rally have increased, albeit that the bad
news will not be over" said Gerhard Schwarz, head of global
equity strategy at UniCredit in Munich.
"It will be erratic going forward and a bit more choppy, but
nonetheless the odds have improved that the markets have found a
bottom for now."
Major U.S. stock indexes rose by 1.3-1.6 percent on Friday,
while Europe's FTSEurofirst 300 <> registered a 2.8
percent gain in the previous session.
A choppy banks sector also rose. Societe Generale <SOGN.PA>
gained 2.3 percent after reporting third-quarter net profit was
down 83.7 percent but saying it is financially strong enough to
withstand the difficult market environment.
Standard Chartered <STAN.L> added 4.4 percent and
Commerzbank <CBKG.DE> rose 9.3 percent after saying it will take
an 8.2 billion euro ($10.5 billion) capital injection from the
German state and a further 15 billion in guaranteed funding to
secure refinancing.
Germany's second-biggest bank also said it swung to a net
loss of 285 million euros in the third quarter after a profit of
339 million in same period last year.
But Barclays <BARC.L> sagged 6.4 percent on concern that
raising capital privately is too expensive and dilutive.
Barclays is raising 7 billion pounds, mostly from investors
in Abu Dhabi and Qatar. Analysts at Merrill Lynch estimated the
fundraising may cost investors 3.2 billion pounds.
Deutsche Bank <DBKGn.DE> rose 7.2 percent. Germany's largest
bank will not tap into a rescue fund launched by the German
government to help banks hit by the global financial crisis, its
chief executive said on Sunday. []
PHARMAS GAIN
Shares in UCB <UCB.BR> gained 12.6 percent after U.S.
regulators approved the Belgian drugmaker's over-active bladder
drug Toviaz, which is being distributed by Pfizer <PFE.N>.
Other pharmaceuticals forged higher, with Novartis <NOVN.VX>
up 0.8 percent, GlaxoSmithKline <GSK.L> rising 1 percent and
Merck <MRCG.DE> up 1.6 percent.
Defensive utilities shares also rose, with E.ON <EONGn.DE>
gaining 4.8 percent, RWE <RWEG.DE> up 2.6 percent and Veolia
<VIE.PA> adding 0.8 percent.
Volkswagen (VW) <VOWG.DE> shed about 13 percent and was the
biggest percentage faller in Europe. Ordinary shares in VW could
be expelled from the DAX index <> as early next Thursday,
the Frankfurt stock exchange operator said on Friday.
[]
Separately, VW plans to produce virtually all the components
for motors used in hybrid and electric vehicles on its own,
unlike competitors who rely on suppliers, German magazine auto
motor und sport reported. The magazine said, citing company
sources, VW wants to invest 3.2 billion euros in the coming five
years into new component production sites.
Meanwhile, Equinet cut its price target on the stock to 82
euros from 88 euros.
Renault <RENA.PA> added 1.5 percent. The group said it
expected Nissan's <7201.T> fiscal second-quarter earnings to
lead to a contribution of 189 million euros to Renault's
second-half net profit. []
(Editing by Victoria Bryan)
