* FTSEurofirst 300 gains 0.6 pct, breaks 3-day losing run
* Banking stocks gain on central bank moves; HBOS jumps
* Commodities stage recovery
By Joanne Frearson
LONDON, Sept 18 (Reuters) - European shares rose in choppy
trade on Thursday to break a three-day losing streak, led by
financials as coordinated action by global central banks eased
conditions in financial markets.
At 0856 GMT the FTSEurofirst was up 0.6 percent at 1,076.14,
having been down as much as 0.7 percent earlier.
The banking sector, which has taken a battering this week,
added most points to the index with the DJ Stoxx European
banking benchmark <.SX7P> up 2.7 percent.
"This is a potential respite after horrendous days in the
U.S. But who knows, it is too early to be positive," said Howard
Wheeldon, strategist at BGC Partners.
HBOS <HBOS.L> surged as much as 45 percent after Lloyds TSB
<LLOY.L> sealed a 12.2 billion pound rescue deal to buy HBOS.
Lloyds fell 7.5 percent before rallying to show a small gain.
Barclays <BARC.L>, BNP Paribas <BNPP.PA> and UBS <UBSN.VX>
were between 4 percent to 7 percent higher.
Investors' credit woes were eased after the Federal Reserve
and the world's top central banks offered to pump billions of
dollars into global money markets in a coordinated effort to
ease a funding squeeze triggered by the upheaval on Wall Street.
[]
The European Central Bank said it joined forces with the Fed
and central banks of Canada, Switzerland, Japan and Britain to
boost liquidity in global financial markets.
The ECB and the Bank of England said they would each offer
up to $40 billion in overnight funds. The Fed said it would
authorise $180 billion expansion of temporary foreign currency
swap arrangements and Bank of Japan announced it would launch
dollar-supply operations as part of the worldwide effort to
tackle the dollar shortage.
"When the banks sit down and cumulatively add liquidity to
markets it should be seen as positive. But they've done this on
an individual basis before, and it's helped for 48 hours and
then been forgotten," said a trader.
However, insurers were lower with Allianz <ALVG.DE> down 4.7
percent. Allianz <ALVG.DE> and Commerzbank denied rumours that
the sale of the insurer's Dresdner Bank to Commerzbank <CBKG.DE>
was at risk. []
Oil stocks were also recovering from heavy losses, with BP
<BP.L>, Shell <RDSa.L> and Total <TOTF.PA> up 1.5 to 1.8
percent.
Miners also gained. Anglo American <AAL.L>, Antofagasta
<ANTO.L>, Rio Tinto <RIO.L>, Vedanta Resources <VED.L> and BHP
Billiton <BLT.L> traded 1-3.8 percent higher.
Across Europe, the FTSE 100 <> index was up 0.96
percent, the German's Dax was <> was 0.11 percent higher
and France's CAC 40 <FCHI> was up 0.8 percent.
BEVERAGE STOCKS WEIGH
The beverage sector was the top-weighted loser, led by
Pernod Ricard <PERP.PA> which slipped 5 percent after saying it
did not get the boost it expected in China from the Olympics and
sales growth in the quarter to September would remain modest.
Carlsberg <CARLb.CO> fell 1.4 percent after Goldman Sachs
cut its price target to 530 Danish crowns from 580 Danish crowns
and removed its from its pan-European conviction buy list.
Later in the session investors will be looking at U.S.
jobless claims at 1230 GMT.
"U.S. jobless are likely to be weak," said Justin Urquhart
Stewart, investment director at Seven Investment Management.
The FTSEurofirst index <> remains on track for its
worst week since July 2002, having fallen 7.4 percent as rattled
investors dumped financial stocks in the wake of the failure of
Lehman Brothers <LEH.P> and the takeover of Merrill Lynch
<MER.N> by Bank of America <BAC.N>.
(Reporting by Joanne Frearson)
