* FTSEurofirst 300 ends 0.1 pct higher
* Siemens keeps outlook, reassures investors on earnings
* Banks extend Monday's recovery; RBS rises 8.3 pct
By Blaise Robinson
PARIS, Jan 27 (Reuters) - European stocks inched higher on
Tuesday, as Siemens <SIEGn.DE> calmed investors' fears over
corporate results, offsetting grim U.S. consumer confidence
data.
The German industrial conglomerate stuck to its full-year
profit outlook, sending its stock up 2.8 percent and boosting
industrial shares such as Alstom's <ALSO.PA>, which gained 4.2
percent.
The FTSEurofirst 300 <> index of top European shares
staged a late rally and closed 0.1 percent higher at 785.64
points. The benchmark index soared 3.2 percent on Monday.
"Short-term rallies are to be expected, but stocks will
certainly revisit their historical lows before we get an
L-shaped recovery, with anaemic growth for a while," said Pierre
Sabatier, head of strategy at Pythagore Investment, in Paris.
"More forecast downgrades are to be expected. Typically, in
a recession, the margin of error of analysts explodes. Their
estimates are usually backwards-looking," he said.
Stocks had fallen more than 1 percent in afternoon trade
after data showed U.S. consumer confidence fell to a record low
in January, hit by the ongoing housing slump and bleak job
market, fuelling fears over the outlook for the world's biggest
economy.
The Conference Board, an industry group, said its sentiment
index fell to 37.7 from a revised 38.6 in December, confounding
forecasts for a small uptick.
Recently hammered banks added to their previous session's
recovery, with Royal Bank of Scotland <RBS.L> up 8.3 percent,
Credit Agricole <CAGR.PA> up 3.2 percent, Bank of Ireland
<BKIR.I> up 7.7 percent, and BBVA <BBVA.MC> up 2.8 percent.
Despite the two-day rally, the DJ Stoxx banking index
<.SX7P> is still down 16 percent this year.
The FTSEurofirst 300 is down 5.6 percent in 2009.
Auto stocks, beaten down over the past few weeks, were also
on the rise on Tuesday, with BMW <BMWG.DE> up 2 percent, Daimler
<DAIGn.DE> up 3.1 percent, and Peugeot <PEUP.PA> up 2.6 percent.
COLLAPSING DEMAND
Pharmaceutical shares, which have been outperforming the
market this month, were among the biggest losers, with
AstraZeneca <AZN.L> down 3.9 percent, Roche <ROG.VX> down 2.4
percent, and Sanofi-Aventis <SASY.PA> down 2.7 percent.
Around Europe, the UK's FTSE 100 index <> dropped 0.4
percent, hit by the profit taking on big pharma stocks as well
as a drop in a number of heavyweight mining shares such as
Xtrata <XTA.L>, which fell along with metals prices on demand
worries.
Xtrata shed 4.9 percent, and Anglo American <AAL.L> lost 1.3
percent.
Germany's DAX index <> fell 0.08 percent and France's
CAC 40 <> was 0.03 percent lower.
Shares in chemical companies lost ground, dragged by a
downbeat note from J.P. Morgan, citing potential further
earnings risk from progressive price erosion.
"Collapsing demand in a number of key end markets will, we
estimate, trigger average volume losses in fiscal 2009 of 6.3
percent across the sector. We expect most of this contraction
will be felt in the first half of the year, with those most
exposed losing between 8 percent and 10 percent of volumes
during 2009," J.P.Morgan analysts wrote.
(Reporting by Blaise Robinson, editing by Will Waterman)
