* Top-300 index rises 0.2 percent
* Energy stocks lead on back of higher crude oil price
* U.S. durable goods data brings cheer
By Peter Starck
FRANKFURT, Aug 27 (Reuters) - European shares rose on
Wednesday as higher crude oil prices lifted energy stocks such
as Royal Dutch Shell <RDSa.L> and strong U.S. durable goods data
eased concerns about a recession in the world's largest economy.
The FTSEurofirst 300 <> index of top European shares
closed 0.2 percent higher at 1,173.64 points, repeating the
previous session's advance.
The oil and gas sector <.SXEP> was the top gainer, up 1.6
percent, as the price of crude oil for October delivery <CLc1>
rose for the third straight day, hitting $119 a barrel, boosted
by the possibility that a storm could threaten Gulf of Mexico
installations as well as data showing an unexpected fall in U.S.
crude stocks.
Royal Dutch Shell <RDSa.L> shares climbed 2.3 percent and BP
<BP.L> was up 1.8 percent.
"The oil sector in particular, coupled with the steady
recovery we have seen in the crude price over the past week,
seems to be attracting interest from investors again," said
David Jones, chief market strategist at IG Index in London.
London's energy-heavy FTSE 100 <> outpaced other top
national share indexes in Europe, rising 1.1 percent, with the
petrochemicals sector accounting for over one third of the gain.
Frankfurt's DAX <> fell 0.3 percent while the CAC 40
<> in Paris edged up 0.1 percent.
Europe's top-300 index stayed in negative territory for much
of the day as investors fretted over the jump in oil prices,
which once again lifted inflation concerns to the fore, and over
geopolitical tensions between Russia and the West.
Western governments have issued strongly worded
condemnations of Moscow's recognition of the breakaway Abkhazia
and South Ossetia regions, a move which JPMorgan in a strategy
note labelled as "a blow to already-bruised investor sentiment."
But stock markets got a lift in the afternoon from the U.S.
durable goods data, which sparked a rally on Wall Street.
"Today's data show quite vividly how distant a recession
scenario is for the U.S. economy," DekaBank said in a note.
Nevertheless, in the year so far stocks, typically seen as a
risky asset class, have fallen close to 20 percent according to
the MSCI World index <.MIWD00000PUS> amid growth, inflation and
credit market woes.
WHAT'S PRICED IN?
"The benefits of policies to counter credit and economic
concerns and the hope for inflation relief seem increasingly to
be in the price of risky assets, as both credit and equities
have remained range-bound despite signs of a global slowdown,"
Morgan Stanley said in a note.
"But a prolonged economic and credit downturn probably is
not in the price," Morgan Stanley said, adding: "With global
growth slowing, there is reason to worry that the adverse
feedback from the economy to credit quality will trigger more
financial dislocations."
Banks -- in the spotlight on both sides of the Atlantic for
the past 12 months after massive writedowns on investments in
risky U.S. mortgage securities, which caused credit market
strains -- were mixed on Tuesday.
Anglo Irish Bank <ANGL.I> shot up 8.7 percent, British
mortgage lender HBOS <HBOS.L> gained 2.8 percent and Royal Bank
of Scotland <RBS.L> firmed 1.8 percent while French group
Natixis <CNAT.PA> slipped 4.9 percent and Swiss bank UBS
<UBSN.VX> fell 1.3 percent.
Higher prices for base and precious metals helped mining
stocks. London-listed Chilean miner Antofagasta <ANTO.L> rose
3.9 percent to 593 pence after posting an 8.8 percent rise in
its first-half profit as higher copper output and prices
outweighed rising costs.
"Overall a strong set of numbers although costs remain an
issue," Citigroup said in a note, reiterating its "buy"
recommendation and 800 pence price target.
Anglo American <AAL.L> was up 2.9 percent and Rio Tinto
<RIO.L> added 1.1 percent. Basic resources, which includes
miners, rose 1.6 percent on the European DJ Stoxx sector index
<.SXPP>.
Shares in Dutch brewer Heineken NV <HEIN.AS> rose 1.8
percent after it reported a 7.4 percent rise in first-half
operating profit.
Credit Suisse, which rates Heineken "outperform", said the
outlook for the second half was "reassuring with a solid volume
dynamic expected to continue."
German travel and shipping group TUI <TUIGn.DE> dropped 2.4
percent on worries that bids for its Hapag-Lloyd container
shipping unit were low due to worsening shipping conditions.
But Danish shipping and oil conglomerate A.P. Moeller Maersk
<MAERSKb.CO>, which runs the world's biggest container shipping
line, reported higher than expected first-half profits and
raised its full-year outlook, sending its shares up 7 percent.
(Additional reporting by Atul Prakash in London; Editing by
Greg Mahlich)
