European shares hit highest close in two weeks

                                
 * FTSEurofirst 300 rises 2 pct to highest close in 2 weeks
                                
 * Financials gain; UniCredit jumps ahead of results
                                
 * Commodity shares up; higher crude, metals prices support
                                
 
                                
 By Brian Gorman
                                
 LONDON, Nov 9 (Reuters) - European shares hit a two-week
closing high on Monday, boosted by financial and commodity
shares, and after the Group of 20 pledged to keep economic
stimulus in place until recovery was assured.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
rose 2 percent to 1,012.23 points, the highest close since Oct.
22 and the first time since Oct. 23 it has closed above 1,000.
                                
 The index has gained for four straight days and is up 56.8
percent from its lifetime low of March 9, as investors have
become more confident on the prospects for economic recovery. 
                                
 Group of 20 finance ministers pledged on Saturday to prepare
strategies to end emergency support for their economies, but to
keep the aid flowing until recovery was assured. [ID:nL7204184]
                                
 Other factors were also pushing equities higher, said Franz
Wenzel, strategist at AXA Investment Managers, in Paris. "The
macroeconomic picture is getting better. The Fed is indicating
interest rates won't go higher for some time. 
                                
 "And in Europe, we're behind the curve, so there's no point
in lifting rates here before the U.S."
                                
 He added: "Equities are still cheap. The rally hasn't been
enough to pull the trigger as far as valuations are concerned."
                                
 Banks added most points to the index.
                                
 Barclays <BARC.L> and HSBC <HSBA.L> ended the day up 1.9 and
1.3 percent respectively ahead of trading updates on Tuesday.
UniCredit <CRDI.MI>, which reports results on Wednesday, rose
5.3 percent.
                                
 BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Credit
Suisse <CSGN.VX>, Deutsche Bank <DBKGn.DE> and Societe Generale
<SOGN.PA> rose between 2.3 and 4.1 percent.
                                
 The European bank index <.SX7P> is up more than 165 percent
from the March low.
                                
 Investors' appetite for risky assets such as equities grew,
with the VDAX-NEW volatility index <.V1XI> falling 4.4 percent
to a two-week low. The lower the index, which is based on sell
and buy options on Frankfurt's top-30 stocks <0#.GDAXI>, the
higher the market's desire to take risk.
                                
 Europe's largest insurer Allianz <ALVG.DE> rose 4.3 percent
after it posted a forecast-beating rise in third-quarter profit.
[ID:nL8291920]
                                
 The results helped lift shares across the sector, with the
DJ STOXX index of European insurers <.SXIP> gaining 2.7 percent.
                                
 Prudential <PRU.L> gained 5.2 percent, also supported by
AXA's <AXAF.PA> decision to buy out its Asian assets, a move
traders say highlighted the value of Prudential's own Asian
businesses. AXA fell 1.2 percent on its plan for a 2 billion
euro ($3 billion) rights issue. [ID:nSYD420146].
                                
 AXA rose 0.4 percent.
                                
 Cadbury <CBRY.L> closed just 0.4 percent higher after Kraft
Foods <KFT.N> chief Irene Rosenfeld refused to sweeten her $16.4
billion bid for chocolate maker Cadbury <CBRY.L>. [ID:nL9380032]
                                
 Vodafone <VOD.L> rose 1.6 percent, ahead of its first-half
results on Tuesday. 
                                
 Across Europe, Britain's FTSE 100 index <.FTSE>, Germany's
DAX <.GDAXI> and France's CAC 40 <.FCHI> rose between 1.8 and
2.4 percent.
                                
 Wall Street was higher around the time European bourses were
closing. The Dow Jones <.DJI>, S&P 500 <.SPX> and Nasdaq
Composite <.IXIC> were up between 1.4 and 1.5 percent.
                                
 
                                
 COMMODITES GAIN
                                
 Commodity shares were among top gainers as spot gold <XAU=>
hit record highs above $1,100 an ounce as a weaker dollar - more
than $1.50 against the euro -  boosted its appeal as an
alternative asset. Copper <MCU3> and other metals also rose. 
                                
 Miners BHP Billiton <BLT.L>, Anglo American <AAL.L>,
Antofagasta <ANTO.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L> rose
between 4.2 and 5 percent.
                                
 Crude futures <CLc1> soared more than 3 percent towards $80
a barrel, after Hurricane Ida affected some U.S. oil and gas
facilities. 
                                
 BP <BP.L>, Royal Dutch Shell <RDSa.L>, Total <TOTF.PA> and
StatoilHydro <STL.OL> added 1.9 to 2.9 percent.
                                
 In macroeconomic news, German industrial output surged way
above forecasts in September, boosted by a jump in demand for
capital goods that set the seal on a strong rebound in Europe's
largest economy during the third quarter.  [ID:nL9439758]
                                
 But HSBC's strategists remained cautious about the prospects
for equities: "The rally in global equity markets has pushed
valuations back up to their level of early 2007," they said in a
note.
                                
 "Equity markets are therefore no longer at the bargain
levels of early 2009. Whilst not expensive relative to the
longer term, we recognise that valuations are now closer to fair
value and look less appealing than earlier in the year."
                                
(Additional reporting by Atul Prakash; Editing by David
Cowell)