Europe shares end sharply higher; US data boosts

                                
 * FTSEurofirst 300 closes 1.6 pct higher
                                
 * Financials up; SocGen rises on retail banking, bid rumours
                                
 * U.S. data points to recovery; Fed statement awaited
                                
 By Brian Gorman
                                
 LONDON, Nov 4 (Reuters) - European shares rose sharply on
Wednesday, with financials and automakers the major gainers, and
with more evidence of economic recovery in the United States
ahead of the Federal Reserve's statement at 1915 GMT.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
rose 1.6 percent to close at 984.64 points, more than recouping
the previous session's losses.
                                
 The benchmark index has gained more than 52 percent since
hitting a record low in early March.
                                
 Banks added most to the index. Societe Generale <SOGN.PA>
gained 4.6 percent, boosted by a solid third-quarter performance
at its French retail banking division and more bid speculation.
[ID:nL3620732]
                                
 Barclays <BARC.L>, Banco Santander <SAN.MC>, BNP Paribas
<BNPP.PA>, HSBC <HSBA.L> and UBS <UBSN.VX> were up between 1.2
and 4.2 percent.
                                
 The Fed is expected to reaffirm its intention to keep U.S.
interest rates at ultra-low levels for a long time to support
the economy, even as signs of recovery accumulate.
[ID:nN04432358]
                                
 Data from two sources helped boost sentiment on the U.S.
economy. The U.S. service sector grew in October for the second
consecutive month but at a slower pace than forecast.
[ID:nN042167]
                                
 U.S. companies reduced jobs in October at the slowest pace
in more than a year, suggesting some stabilisation in the labour
market as the economy emerges from recession, a report showed.
                                
 U.S. private employers shed 203,000 jobs in October, fewer
than a revised 227,000 jobs lost in September, a report by ADP
Employer Services said. The September fall was originally
reported at 254,000. [ID:nN04545735]
                                
 "Equities are in a sweet spot at the moment, said Jeremy
Batstone-Carr, strategist at Charles Stanley. "Interest rates
are low. Growth is apparently taking place, and investors think
this is a good time to be in the riskier assets.
                                
 "But they are walking a narrow tightrope. One might argue
that the gains today boil down to the two words 'extended
period' in relation to the Fed's' continuation of its easing of
policy."
                                
 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 and 1.3 percent.
                                
Across Europe, the FTSE 100 <.FTSE> index ended 1.4 percent
higher, Germany's DAX <.GDAXI> was up 1.7 percent and France's
CAC 40 <.FCHI> rose 2.4 percent.
                                
 
                                
 INSURERS GAIN
                                
 Consumer caution dented British insurer Aviva's <AV.L> nine
months sales, but its shares closed 5.5 percent higher on the
company's modestly positive outlook and strong capital buffer.
[ID:nL4413629]
                                
 Zurich Financial <ZURN.VX> rose 3 percent, ahead of results
on Thursday. Prudential <PRU.L> rose 4 percent. France's AXA
<AXAF.PA> rose 2 percent.
                                
 Auto shares were given a boost after Nissan Motors <7201.T>
revised its annual forecast and U.S. car sales rose on Tuesday.
[ID:nL496323] [ID:nN03519331]
                                
 Renault <RENA.PA>, which has a significant stake in Nissan
rose 4.1 percent. Daimler <DAIGn.DE>, BMW <BMWG.DE> and Peugeot
<PEUP.PA> rose 2.1 to 3.1 percent.
                                
 Oils gained as crude prices <CLc1> rose above $80.70 a
barrel after a U.S. government report showed inventories had
fallen. [ID:nSP538800]
                                
 Total <TOTF.PA> and StatoilHydro <STL.OL> rose 1.7 and 2.4
percent respectively despite both reporting third-quarter profit
sharply down from a year earlier.  [ID:nL489506]
                                
 Cairn Energy <CNE.L> gained 5 percent after its India
subsidiary reached a deal to supply crude oil to Reliance
Industries [ID:nBMA006349ENI]
                                
 Miners were supported by gold prices hitting a record above
$1,095 an ounce, as the dollar weakened, as well as higher
prices for copper and other metals.
                                
 Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton
<BLT.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L> rose 2.8 to 5.9
percent.
                                
 Retailers performed well, with Next <NXT.L> and Marks &
Spencer <MKS.L> up 5.6 percent and 6 percent respectively after
reporting positive trading updates.
                                
 Shares in Irish financials rose after credit ratings agency
Fitch downgraded the country's sovereign rating by two notches
to "AA-", a move analysts said had been expected.
                                
 Bank of Ireland <BKIR.I>, which also posted a first-half
loss on Wednesday, rose 24.6 percent. Allied Irish Bank <ALBK.I>
rose 19.7 percent.
  (Additional reporting by Joanne Frearson; editing by Mike
Nesbit)