* FTSEurofirst 300 closes up 1.2 pct
* Banks gain; energy up as crude surges
* Antofagasta gains as expansion plans on track
By Joanne Frearson
LONDON, June 10 (Reuters) - European shares closed higher on
Wednesday, with banks leading the movers, while energy stocks
were given a boost by surging crude prices and miners rose as
copper producer Antofagasta <ANTO.L> said expansion plans are on
track.
The pan-European FTSEurofirst 300 <> index of top
shares closed up 1.2 percent at 879.98 points after choppy trade
between 889.75 and 870.37 points earlier in the session.
The benchmark index has gained around 36 percent since its
lifetime low on March 9 as investors have become more confident
on the prospects for economic recovery.
"It has been a good day, but I am not entirely sure if there
is entirely any real justification behind it. There is no real
news that has really caused anything to change - we all know
that the U.S. banks have been trying to pay back taxpayers
funds," said Peter Dixon, economist at Commerzbank.
"I think the market is going up in advance of a recovery. I
am not sure if this is sustainable," he said.
Banks added the most points to the index. HSBC <HSBA.L>,
Banco Santander <SAN.MC>, UBS <UBSN.VX>, Credit Suisse <CSGN.VX>
and BNP Paribas <BNPP.PA> were up 1 to 4.8 percent.
On Tuesday, the U.S. Treasury said that 10 of the nation's
biggest banks were approved to pay back $68 billion in taxpayer
funds under the Troubled Asset Relief Program (TARP)
[] []
The banks will be free from restrictions on executive
compensation, dividend payments and share purchases once they
buy back their preferred shares from the U.S. government.
[]
"The news about TARP is certainly one main reason why we're
seeing strong gains here (in Europe), as this suggests the
sector returns to stability," said Carsten Klude, strategist at
M.M. Warburg in Germany.
Across Europe, the FTSE 100 <> index was up 0.7
percent, Germany's DAX <> gained 1.1 percent and France's
CAC 40 <> was 0.6 percent higher.
COMMODITIES GAIN
Energy stocks rose as oil topped $71 a barrel for the first
time in 7 months with Premier Oil <PMO.L>, BP <BP.L>, Royal
Dutch Shell <RDSa.L> and Total <TOTF.PA> up 0.6 to 3.3 percent.
Miners were were also higher. Chilean copper miner
Antofagasta <ANTO.L> gained 4.6 percent after the group said it
is on track with expansion plans under which output will jump 60
percent by 2011. []
Eurasian Natural Resources Corporation <ENRC.L> jumped 8.1
percent after it said prices may rise for its most profitable
product, ferrochrome.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Rio Tinto
<RIO.L> and Xstrata <XTA.L> were 1.3 to 6.9 percent higher.
Data from three major economies suggesting the worst of the
global recession may be over also added to the investor
optimism.
In China, newspapers said factory output rose in May at the
fastest pace since last September, while official data showed
British industrial output rose in April for the first time in
more than a year and Italian output rose after 11 straight
monthly falls. []
However, economists cautioned that difficulties still lay
ahead across the globe.
In individual stock movers, Adidas <ADSG.DE> rose 7.3
percent after it said it expected sales in South Africa to grow
at a double-digit rate in the years to come thanks to the
football world cup in the country next year. []
On the downside, defensives were out of favour as investors
turned towards cyclical stocks.
Drugmakers were in the doldrums with AstraZeneca <AZN.L>,
Sanofi-Aventis <SASY.PA> and Novartis <NOVN.VX> down 0.8 to 1
percent.
(additional reporting by Christoph Steitz; Editing by Hans
Peters)
