* FTSEurofirst surges 5.8 pct
* Banks, oils lead index higher
* U.S. infrastructure, auto moves lift key sectors
By Sitaraman Shankar
LONDON, Dec 8 (Reuters) - European shares surged in early
trade on Monday, led by banks and oils and tracking gains in the
United States and Asia on hopes that government stimulus
packages will help soften the impact of a recession.
At 0916 GMT, the FTSEurofirst 300 <> index of top
European shares traded 5.8 percent higher at 840.05 points.
Banks and oils added most points to the index.
Among financials, index heavyweights HSBC <HSBA.L> and
Santander <SAN.MC> rose 3.1 and 6 percent respectively, while
Total <TOTF.PA> and Royal Dutch Shell <RDSa.AS> soared more than
8 percent as oil <CLc1> jumped $2.5 to $43.32 a barrel.
Italian oil group Eni <ENI.MI> jumped 9.3 percent after
Libya's ambassador to Italy said his country would be interested
in buying up to 10 percent of Eni, one of a number of
investments it is considering in Italy.
"The central banks have done their job and now the focus is
on governments -- in addition to Obama's plan we have stimulus
packages from India, Australia and China," said Thierry Lacraz,
strategist at Pictet in Geneva.
"While this will not avoid a recession, investors at least
have the feeling that the people in charge are doing the right
thing," he said.
U.S. president-elect Barack Obama said on Saturday that his
plan to create at least 2.5 million new jobs included the
largest infrastructure investment since the 1950s and a huge
effort to reduce U.S. government energy use.
The U.S. Senate is due to reconvene on Monday as White House
and Democratic congressional negotiators sought to draft
legislation to bail out the auto sector.
Across Europe, Britain's FTSE <> rose 5 percent,
France's CAC <> gained 6.4 percent and Germany's DAX
<> rose 6.2 percent.
A standout loser was Europe's biggest independent mobile
phone retailer, Carphone Warehouse <CPW.L>, which fell 5.4
percent to a 5-1/2 year low after it said an outgoing director
had pledged 136 million shares in the company against personal
loans.
Two traders said that the fear was that Ross would have to
sell the shares. Carphone said that the executive had no current
intention of selling any of his shares.
INFRASTRUCTURE PUSH
The U.S. automaker bailout and push on infrastructure helped
auto, resource, engineering and building material stocks
rebound.
Auto groups Daimler <DAIGn.DE> and Renault <RENA.PA> rose
9.9 percent and 8.5 percent respectively.
Steelmakers ArcelorMittal <MTP.PA> and ThyssenKrupp
<TKAG.DE>, engineers Siemens <SIEGn.DE> and Alstom <ALSO.PA> and
building material groups Wolseley <WOS.L> and Saint-Gobain
<SGOB.PA> rose 6-11 percent.
"The industrials were beaten down after German factory
orders last week that were worse than expected, and are being
helped by positive sentiment in the United States," said a
trader.
"The bailout of the big autos has indirect benefits for a
lot of sectors."
German exchange operator Deutsche Boerse <DB1Gn.DE> rose 6.4
percent after it said over the weekend that it was in regular
talks with other exchanges such as NYSE Euronext <NYX.PA>.
Boerse said on Sunday that any merger talks with NYSE
Euronext <NYX.PA> had ended without success. Such a merger,
which German magazine Der Spiegel said was being planned, would
have created the world's biggest exchange group.
NYSE Euronext was up 9.2 percent.
The FTSEurofirst 300 has fallen 44 percent so far this year,
hammered by a credit crisis that piled up losses at banks and
tipped major economies into recession.
The index fell 12.7 percent in October -- its worst month in
five years -- and 7.2 percent in November. It is down 2 percent
so far in December.
Analysts said markets had fallen so far that value stocks
appeared cheaper than usual.
"Value stocks offer greater 'value' than is normal at
present," Nomura strategists wrote in a note.
"On a sector-neutral basis, the least expensive stocks trade
at a 60 percent price/book discount to expensive stocks. Outside
of the 1999-2000 period, this is one of the steepest discounts
for value that we have seen."
(Reporting by Sitaraman Shankar; editing by Simon Jessop)
