Europe shares close higher and rise for third month

                                
 * FTSEurofirst 300 closes 0.2 pct higher
                                
 * Index rises for third straight month
                                
 * Energy shares rise as crude reaches six-month highs
                                
 By Brian Gorman
                                
 LONDON, May 29 (Reuters) - European shares closed higher on Friday, with
oils and miners rising on stronger commodities prices, though mixed economic
news from the United States limited gains.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares rose 0.2 percent
to 862.17 points, having been up as much as 1.4 percent earlier.
                                
 Over the week, the index gained 0.7 percent. In May, it rose 4 percent, a
third straight monthly gain and its best winning streak in two years.
                                
 "There's some momentum that could last for another couple of months," said
Georgina Taylor, equity strategist, Legal & General Investment Management. "But
due to the rally, I think the market has become more sensitive to newsflow."
                                
 "The story is still the same", said Taylor, "but the movements may be
smaller in magnitude. On the whole, data is surprising on the upside."
                                
 Oil and gas stocks were among top gainers as the price of crude oil <CLc1>
rose to a six-month high of more than $66 a barrel, boosted by economic
optimism. [ID:nSYD450019]
                                
 BG Group <BG.L> rose 4.5 percent; Total <TOTF.PA>, BP <BP.L>, Royal Dutch
Shell <RDSa.L>, Repsol <REP.MC> and StatoilHydro <STL.OL> closed between 0.5 and
2.4 percent higher.
 Likewise, miners gained after copper and gold gained, with the latter
boosted by the dollar falling to a five-moth low against a basket of currencies.
                                
 Anglo American <AAL.L>, Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Lonmin
<LMI.L>, Rio Tinto <RIO.L> and Xstrata <XTA.L> rose between 2.4 and 8.4 percent.
                                
 "Commodities are currently playing the recovery scenario," said Carsten
Klude, strategist at M.M. Warburg.
                                
 U.S. gross domestic product, which measures total goods and services output
within U.S. borders, dropped at a 5.7 percent annual rate, the Commerce
Department said, less than the 6.1 percent estimated by the government last
month. The economy contracted at a 6.3 percent pace in the fourth quarter.
[ID:nN29399341]
                                
 The Reuters/University of Michigan Surveys of Consumers' sentiment gauge
rose to 68.7 in May from 65.1 in April. That was the highest reading since
September. [ID:nN25352681]
                                
 But business activity in the U.S. Midwest contracted in May at a much more
severe rate than expected, reversing an unexpectedly strong result last month.
[ID:nN29401427] [ID:nNAT006960]
                                
 
                                
 BANKS RISE 
                                
 Most banks rose, with several recovering from losses on Thursday.  Credit
Suisse <CSGN.VX>, HSBC <HSBA.L>, Societe Generale <SOGN.PA> and UBS <UBSN.VX>
were up between 1.8 and 3 percent. 
                                
 Defensives were out of favour. Italian utility A2A <A2.MI> fell 3.8 percent,
with the annual shareholders' meeting, which had been due on Friday,  postponed
until June 3 [ID:nLT1016216].
                                
 Another Italian utility, Enel <ENEI.MI>, fell 4.9 percent after pricing its
8 billion euro ($11.19 billion) rights issue at a hefty discount [ID:nLT505971]
                                
 Retailers which fell included  Sainsbury <SBRY.L> and Carrefour <CARR.PA>,
down 2.7 and 2.6 percent respectively.
                                
 The European benchmark index lost 45 percent in 2008 and fell further early
this year, hitting a record low on March 9, but has risen 33.6 percent since
then.
                                
 Across Europe, Germany's DAX <.GDAXI> rose 0.2 percent; Britain's FTSE 100
<.FTSE> and France's CAC-40 <.FCHI> were up 0.7 and 0.4 percent respectively.
 (Additional reporting by Christoph Steitz, editing by Rupert Winchester)