* FTSEurofirst 300 closes up 2.8 percent
* U.S., China data lifts economic recovery hopes
* Commodity stocks, banks, autos top gainers
By Brian Gorman
LONDON, June 1 (Reuters) - European shares closed at their
highest level since Jan. 6 on Monday, with energy companies and
miners among the biggest gainers as data from the United States
and China sparked optimism on economic recovery.
The FTSEurofirst 300 <> index of top European shares
rose 2.8 percent to 886.27.
"There's more risk appetite. I think market participants are
increasingly reassured about the strength of the economic
recovery coming through," said Henk Potts, strategist at
Barclays Stock Brokers, in London.
"(Historical) data tells us the situation isn't getting any
worse, and the forward-looking data indicates a positive
response to the monetary and fiscal stimulus."
Prices for crude oil <CLc1> and copper <MCU3=LX> hit
seven-month highs, sending shares in miners and energy companies
up sharply.
Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>, Lonmin <LMI.L>, Rio Tinto <RIO.L>, Vedanta Resources
<VED.L> and Xstrata <XTA.L> rose 5.3-10.5 percent.
Steelmaker ArcelorMittal <ISPA.AS> surged 10 percent.
The Basic Resources index <.SXPP>, which includes mining and
steel companies, was a standout gainer, up 8 percent.
China's official purchasing managers' index (PMI) in May
recorded its third straight month above the mark of 50 that
separates expansion from contraction, fuelling optimism the
worst of the global downturn may be over. []
"Metals and mining remain the best avenue to gain exposure
to a variety of themes: steepening yield curves, rebound in
manufacturing activity, sustained Chinese and EM growth, global
asset reflation, weakening dollar," JPMorgan said in a note.
U.S. data further fuelled hopes of recovery.
The U.S. manufacturing sector contracted at a slower rate in
May, while consumer spending fell modestly in April, according
to reports on Monday, further evidence the deep recession may be
easing. []
In the euro zone, manufacturing PMI rose to a seventh-month
high of 40.7, up from 36.8 in April and just above the flash
reading and economists' expectations for it to hit 40.5.
Across Europe, with trading volumes reduced by public
holidays in some countries, Britain's FTSE 100 index <> was
up 2 percent; Germany's DAX <> gained 4.1 percent and the
French CAC 40 <> added 3.1 percent.
As European bourses were closing, the Dow Jones <>, S&P
500 <.SPX> and Nasdaq Composite <> were up 2.4-2.6 percent.
For investors, the upbeat economic outlook more than offset
any negative effects of the bankruptcy of General Motors <GM.N>,
the biggest ever in U.S. manufacturing. []
OILS GAIN
With crude at $68 a barrel, energy companies Total
<TOTF.PA>, ENI <ENI.MI>, BP <BP.L> and Royal Dutch Shell
<RDSa.L> rose 1.7-3.9 percent.
European auto shares gained, with analysts describing the
rise as a "relief rally" as GM's troubles move towards
resolution. Peugeot <PEUP.PA> surged 9.6 percent, also boosted
by a price target hike from Credit Suisse. Renault <RENA.PA>,
BMW <BMWG.DE> and Daimler <DAIGn.DE> rose between 6 and 9.1
percent.
Banks were also major gainers.
Banco Santander <SAN.MC>, Barclays <BARC.L>, Deutsche Bank
<DBKGn.DE>, Societe Generale <SOGN.PA> and UniCredit <CRDI.MI>
rose 2.8-6.9 percent.
Kingfisher <KGF.L>, owner of British home improvement chain
B&Q, and French conglomerate Bouygues <BOUY.PA> rose 3.9 and 5.1
percent respectively, ahead of updates to the market on Tuesday.
On the first trading day of June, the European benchmark made
its biggest percentage gain since April 2. It is up 37 percent
from the lifetime low hit on March 9, as investors have become
more confident on the prospects for economic recovery.
The benchmark is above its 200-day moving average.
(Additional reporting by Dominic Lau; editing by Dan Lalor)
