European shares hit 4-week closing high; oils gain

                                
 * FTSEurofirst 300 closes 0.2 pct higher
                                
 * Energy firms gain as crude prices top $122
                                
 * French utilities drop on price restrictions
                                
 * Siemens falls after warning second half may be slower
                                
 By Brian Gorman
                                
 LONDON, April 5 (Reuters) - European shares edged up to
their highest close in nearly four weeks on Tuesday, with energy
firms gaining after further unrest in the Middle East pushed
crude prices to a two-and-a-half year high.
                                
  The FTSEurofirst 300 <.FTEU3> index of top European shares
rose 0.2 percent to 1,143.94 points, the highest close since
March 9. Volumes were 94 percent of the index's 90-day average.
                                
 Brent crude <LCOc1> topped $122, and hit its highest in two
and a half years, as the prospect of a stalemate prolonging the
loss of 1.3 million barrels a day of exports from Libya loomed,
amid unsuccessful efforts to end the war and as clashes over the
oil town of Brega intensified. [ID:nLDE7340W0]
                                
 Energy firms to gain included Total <TOTF.PA>, BP <BP.L> and
BG <BG.L>, up between 0.4 percent and 1.2 percent.
                                
 The pan-European index is up 7.2 percent from a mid-March
low, as investors focus more on the strength of the economic
recovery, confident it will not be significantly affected by
unrest in the Middle East and North Africa, or Japan's nuclear
crisis. 
                                
 Analysts said shares could gain further, even as monetary
policy tightens, including an expected rise in European Central
Bank interest rates this week. China's central bank raised
interest rates for the second time this year on Tuesday,
redoubling efforts to cool stubborn price pressures.
[ID:nOSL016063]
                                
 "Equities will be the preferred choice - the price bubble in
bonds is about to burst - yields are not going to stay as low as
they are," said Heino Ruland, strategist at Ruland Research, in
Frankfurt.
                                
 He added that he expected construction-related stocks to be
among those outperforming, as they look to help with rebuilding
projects in Japan.
                                
 Growth in the vast U.S. services sector slowed last month
and price pressures eased slightly, according to an industry
report released on Tuesday, but overall activity expanded for a
16th straight month. [ID:nN05188782]
                                
 But Ruland noted the continued growth in the employment
component, albeit at a slightly lower rate than in the previous
month. 
                                
 Tech shares firmed, after Texas Instruments <TXN.N> late on
Monday offered to buy National Semiconductor <NSM.N> in a deal
worth $6.5 billion, a premium of 78 percent. [ID:nN04281619]
                                
 Infineon Technologies <IFXGn.DE> rose 3.9 percent, while
STMicroelectronics <STM.PA> added 2.9 percent.
                                
 Across Europe, Britain's FTSE 100 <.FTSE> fell 0.2 percent;
Germany's DAX <.GDAXI> and France's CAC40 <.FCHI> were flat.
 Portugal's benchmark <.PSI20> fell 1 percent and Spain's
IBEX <.IBEX> fell 0.7 percent. 
                                
 Euro zone peripheral issues persisted, pushing bond yields
in certain countries higher. 
                                
 Portuguese bond yields hit fresh euro lifetime highs on
Tuesday and were expected to top 10 percent in the next few days
as a new credit rating downgrade added to pressure on the
country to seek aid. [ID:nLDE7341WX]
                                
 
                                
 FRENCH UTILITIES FALL       
                                
 French utilities EDF <EDF.PA> and GDF Suez <GSZ.PA> fell 3.7
and 1.9 percent respectively after France cancelled a planned
increase in gas prices and cut the size of electricity price
hikes to appease public discontent with rising energy costs.
[ID:nLDE7340AL]
                                
 Among other individual shares, German conglomerate Siemens
<SIEGn.DE> fell 1.3 percent after it said it expected business
to slow in the coming months. [ID:nLDE7341G0]
                                
 Bayer <BAYGn.DE> fell 3.6 percent after a late-stage trial
showed its anti-blood-clotting Xarelto pill failed to benefit
patients bed ridden due to acute illness. [ID:nN05108590]
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  Graphics ahead of ECB meeting: http://r.reuters.com/kah88r
  Euro zone credit ratings:      http://r.reuters.com/pyh48r
  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
                                
 The Euro STOXX 50 <.STOXX50E>, the euro zone's blue-chip
index, fell 0.2 percent to 2,950.96. 
                                
 Analysts said while the short-term technical picture for the
STOXX 50 index had improved following gains in the previous
sessions, the index was looking relatively overbought.
                                
 "The latest price action shows that it could be encountering
resistance in the form of its 50-day moving average. It is
possible that selling pressures could develop at these levels,"
said Bill McNamara, technical analyst at Charles Stanley.
                                
 Some caution prevailed ahead of the release of the Federal
Open Market Committee's minutes from its March 15 meeting, due
at 1800 GMT, for insight on the outlook for U.S. interest rates.
 (Additional reporting by Atul Prakash; Graphics by Scott
Barber; Editing by Jon Loades-Carter)