European shares hit 15-month closing high; banks help

                                
 * FTSEurofirst 300 up 0.2 pct; hits 15-month closing high
                                
 * U.S. new home sales data caps gains; banks top gainers
                                
 * Miners track higher metals prices; but pharma down
                                
 
                                
 By Atul Prakash
                                
 LONDON, Dec 23 (Reuters) - European shares hit a near
15-month closing peak on Wednesday, but gains were capped after
U.S. data showed sales of newly built single-family homes
unexpectedly fell to their lowest level in seven months.
                                
 The FTSEurofirst 300 <.FTEU3> index of top European shares
ended 0.2 percent higher at 1,037.34 points, the highest close
since Oct. 3 last year, after ranging between 1,034.25 and
1,041.21 points in thin pre-Christmas trading.
                                
 Total trading volume in shares in the index, which is up 24
percent this year and has surged 60 percent since hitting a
record low in March, was just 41 percent of the three-month
daily average.
                                
 Financial stocks were among the top gainers, with Standard
Chartered <STAN.L>, HSBC <HSBA.L>, Barclays <BARC.L>, Societe
Generale <SOGN.PA>, Credit Agricole <CAGR.PA> and Natixis
<CNAT.PA> rising 0.2 to 1.5 percent.
                                
 Allied Irish Banks <ALBK.I> jumped 9 percent. The bank's
executive chairman said, before a shareholder vote on whether to
join Ireland's "bad bank" scheme, that its further state capital
needs will become clearer over the next three months.
                                
 European shares pared gains in late session after U.S. new
homes sales data came as a setback for the housing market, which
has been showing strong signs of stabilisation after a
three-year slump. Housing was the main trigger of the worst U.S.
recession since the 1930s.
                                
 "It (data) shows that investor sentiment is still very
fragile. We are going to continue to see volatile numbers across
the board," said Henk Potts, strategist at Barclays Wealth.
                                
 "If the extraordinary support is withdrawn, then that will
create a difficult environment from a growth perspective in
2010," he said, referring to the fiscal and monetary measures
taken by governments and central banks to combat the global
downturn.
                                
 Charts, however, suggested the start of another move on the
upside for share prices. The index confirmed the triggering of a
bullish symmetrical triangle in which it has consolidated for
some weeks.
                                
 The index appeared to have cleanly broken above its major
resistance around 1,023 points, the 38.2 percent retracement of
the bear market that began in mid-2007. 
                                
 The triangle has a target of 1,090 points, and the break of
the retracement level suggested a higher medium-term target of
1,140 -- the 50 percent retracement.

                                
 MIXED ECONOMIC DATA
                                
 Investors got some comfort from data showing U.S. consumer
spending rose for a second straight month in November as incomes
recorded their biggest gain in six months, but the new home
sales numbers were a reminder the economic recovery would be
bumpy.
                                
 French consumer spending also dropped slightly in November
compared with the previous month, narrowly undershooting
expectations as shoppers splashed out on cars but cut back
elsewhere. [ID:nLDE5BM0BO]
                                
 Miners were also in demand, tracking a rise in metals
prices. Copper <MCU3> climbed more than 1 percent partly on
looming strike in Chile. BHP Billiton <BLT.L>, Anglo American
<AAL.L>, Antofagasta <ANTO.L>, Rio Tinto <RIO.L>, Xstrata
<XTA.L> and ENRC <ENRC.L> rose 1 to 3.8 percent.
                                
 "There's some window dressing going on," said Justin
Urquhart Stewart, director at Seven Investment Management.
                                
 "Some fund managers are making sure they've got good equity
positions for the end of the year.
                                
 "There's still momentum in there, and it may carry on into
the new year. But the further we go on with this, the more there
will be a correction. Markets don't go up in a straight line."
                                
 Drugmakers, however, lost ground. GlaxoSmithKline <GSK.L>,
Merck <MRCG.DE>, Roche Holding <ROG.VX>, Genmab <GEN.CO> and
Elan Corporation <ELN.I> fell 0.1 to 2.1 percent.
                                
 Switzerland's Novartis <NOVN.VX> agreed to buy privately
held U.S. group Cothera for $120 million, gaining rights to a
heart failure drug and aiming to diversify sales as its
top-selling medicine loses exclusivity. Its shares were flat.
                                
 Across Europe, Britain's FTSE 100 index <.FTSE>, Germany's
DAX <.GDAXI> and France's CAC 40 <.FCHI> rose 0.2-0.8 percent.
 (Additional reporting by Brian Gorman; Editing by Greg Mahlich)