European shares up; reform talks spur banks

                                
 * FTSEurofirst 300 up 0.3 percent
                                
 * Banks higher after U.S. banking reform talks collapse
                                
 * Yara up; says would not raise offer for Terra Industries
                                
 
                                
 By Harpreet Bhal
                                
 LONDON, March 12 (Reuters) - European shares rose on Friday,
reversing falls in the previous session, with banks higher after
talks on banking reform in the United States collapsed, while
investors awaited further economic data for direction.
                                
 By 0928 GMT, the FTSEurofirst 300 <.FTEU3> index of leading
European shares rose 0.3 percent to 1,059.28 points, after
finishing 0.3 percent lower on Thursday.
                                
 The index has rebounded 52 percent since hitting a lifetime
low in March last year, and is up 1.2 percent so far in 2010. So
far this week the index has added 0.4 percent.
                                
 "We'll see a very controlled rally today which is brought on
by our rather lacklustre performance yesterday and New York
being relatively positive," said David Buik, senior partner at
BGC Partners. 
                                
 Banks were among the biggest sector gainers, with Barclays
<BARC.L>, Societe Generale <SOGN.PA>, BNP Paribas <BNPP.PA>,
Royal Bank of Scotland <RBS.L> and Deutsche Bank <DBKGn.DE> up
0.7 to 1.1 percent.
                                
 Chances of a broad overhaul of U.S. financial regulation
dimmed on Thursday after bipartisan Senate talks collapsed,
jeopardising a top Obama administration priority.
[ID:nN11219944] 
                                
 Buik said with the lack of companies reporting results on
Friday, shares may struggle to eke out significant gains, while
economic data set for release from across the Atlantic later in
the session could provide some direction to equities.
                                
 Investors are likely to focus on U.S. monthly retail sales,
due at 1330 GMT, and the Reuters/University of Michigan consumer
sentiment index for March, which is set to be released at 1455
GMT.
                                
 Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC 40 <.FCHI> rose 0.1 to 0.3 percent.
                                
 
                                
 YARA GAINS
                                
 Among individual movers, Norway's Yara International
<YAR.OL> rose 5.7 percent after it said it would not raise its
offer for Terra Industries <TRA.N> to match or exceed a rival
bid from CF Industries Holdings Inc <CF.N>. [ID:nLDE62B0AA] 
                                
 Within the chemicals sector, K+S <SDFG.DE> rose 1.3 percent,
recovering from the previous session's hefty losses, after rival
Potash Corp of Saskatchewan <POT.TO> raised its earnings
forecast, citing a rebound in demand.
                                
 Volkswagen <VOWG_p.DE> climbed 4 percent with traders
pointing to investors covering their short positions and after
Nomura raised its price target to 89 euros from 82 with a "buy"
rating.
                                
 On the downside, Roche <ROG.VX> lost 1.6 percent after the
drugmaker announced the topline results of a phase III study,
known as CALGB 90401, which did not meet its primary objective
of extending overall survival compared to chemotherapy and
prednisone alone.
                                
 Italian oil and gas group Eni SpA <ENI.MI> shed 1.6 percent
after it cut its production growth target, as analysts had
expected, and said investors would have to wait until 2011 to
see any growth in output or dividends. [ID:nLDE62B0CW]
 (Editing by Hans Peters)