Obama boosts European shares; Porsche, VW gain

                                
 * FTSEurofirst 300 index rises 0.8 percent
                                
 * Volkswagen, Porsche up on merger remark
                                
 * Randstad boosted by broker upgrade
                                
 * For up-to-the minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Joanne Frearson
                                
 LONDON, Jan 26 (Reuters) - European shares rose on Wednesday
after U.S. President Barack Obama's plan to freeze government
spending boosted sentiment, while Porsche <PSHG_p.DE> jumped as
it said its merger with Volkswagen <VOWG_p.DE> was on track.
                                
 By 1001 GMT, the pan-European FTSEurofirst 300 <.FTEU3>
index of top shares was 0.8 percent higher at 1,153.05 points,
after falling 0.6 percent on Tuesday.
                                
 "Obama's speech has diminished the chances of a double-dip
recession. That is a positive thing for the markets," Koen De
Leus, strategist at KBC Securities Bolero in Brussels, said.
"There seemed to be no catalysts for the market to go down."
                                
  In his State of the Union address on Tuesday, Obama
proposed a freeze on government spending as well as scrapping
loopholes which favour specific industries and cutting the
corporate tax rate. [ID:nN2539641]
                                
 Carmakers gave the biggest boost to the markets, with the
STOXX Europe 600 Automobiles & Parts <.SXAP> surging 2.4
percent.
                                
 Renault <RENA.PA> jumped 3.9 percent after Les Echos
newspaper reported that the French carmaker expects to sell 3
million vehicles in 2013 compared with 2.62 million last year.
                                
 German carmakers Volkswagen <VOWG_p.DE> and Porsche
<PSHG_p.DE> gained 3.3 percent and 4.1 percent respectively,
after a senior Porsche family member said the planned merger is
on "the right track." [ID:nLDE70P0AZ]
                                
 Porsche also posted a 62.7 percent rise in 2010 unit sales
in China.
  Energy stocks were also in demand. BG Group <BG.L> gained
3.4 percent after a new discovery confirmed light oil in the
Carioca area, offshore Brazil.
                                
 "The key here is that this is yet another discovery along
with recent major success offshore Tanzania (multi-TCF gas
discoveries) that should increase confidence in BG's ability to
deliver its 6-8 percent per annum production growth to 2020,"
Evolution Securities said in a note.
                                
 
                                
 RANDSTAD GAINS
                                
 Looking at individual companies, Dutch staffing company
Randstad <RAND.AS> rose 4.3 percent after Credit Suisse upgraded
the company to "outperform" from "neutral".
                                
 Temporary power provider Aggreko <AGGK.L> was 2.7 percent
higher, after Goldman Sachs initiated coverage on the company
with a "buy" rating.
                                
 U.S. December new home sales data are scheduled for release
at 1500 GMT and after the European market close, investors will
await the outcome of the Federal Reserve's two-day policy
meeting, which they expect to show an improving U.S. economic
outlook. [ID:nN25283937]
                                
 Across Europe, the FTSE 100 <.FTSE> index was up 1.3
percent, Germany's DAX <.GDAXI> was 1.3 percent higher and
France's CAC 40 <.FCHI> gained 0.9 percent.
                                
 (Reporting by Joanne Frearson; Editing by Erica Billingham)