* FTSEurofirst ends 1.7 percent higher, led by banks
* Index helped by "dovish" ECB comment, Fed extension move
* Miners rally on higher metal prices, Alcoa results
By Patrizia Kokot
LONDON, July 9 (Reuters) - European shares closed sharply
higher on Wednesday with recently battered banks staging a
comeback and miners rallying on the back of solid earnings from
U.S. group Alcoa <AA.N>.
The FTSEurofirst 300 <> index of top European shares
closed 1.71 percent higher at 1,181.19 points, recouping
Tuesday's losses.
Banks added nearly 6 points to the index, with Deutsche Bank
<DBKGn.DE> up 4.8 percent, Credit Suisse <CSGN.VX> up 4.1
percent and Barclays <BARC.L> up 5.1 percent.
The European Central Bank acknowledged chances of negative
growth in the second quarter, which analysts interpreted to mean
a lower chance of further rate increases.
"That was quite a dovish statement from the ECB," said
market strategist Bernard McAlinden at NCB Stockbrokers in
Dublin.
"It is good to hear the ECB saying that, because one of the
biggest worries the market has is that the ECB is on a campaign
to hike interest rates," he added.
Comments on Tuesday from Federal Reserve Chairman Ben
Bernanke on extending emergency lending facilities continued to
lift shares, traders said.
Stricken UK mortgage lender Bradford & Bingley <BB.L> soared
27 percent amid signs of a bail out from its peers.
Higher metals prices and better-than-expected results from
Alcoa provided a boost for mining stocks such as XStrata
<XTA.L>, Rio Tinto <RIO.L> and BHP Billiton <BLT.L>, which
gained between 2-5 percent.
M&A TALKS LIFT TUI, AGFA AND COLONIAL
TUI AG <TUIGn.DE> rallied 5.4 percent after sources said
that Russian investor Alexei Mordashov has bought 4 million
shares from Fiesta Hotels and Resorts, which raised hopes of a
faster turnaround at the German shipping and tourism giant.
In neighbouring Belgium, imaging technology company
Agfa-Gevaert <AGFB.BR> ended the session 24.5 percent higher
amid vague talk that Philips <PHG.AS> may be interested in
making a 9 euro per share bid for the group.
Spain's Colonial <COL.MC> clocked up a 14 percent rise after
key shareholder Nozar sold 57 million shares to France's Natixis
<CNAT.PA>. Natixis fell 1.7 percent.
Oil and gas stocks fell as crude traded around $136 a
barrel, well away from recent record highs. Heavyweights BP
<BP.L>, Shell <RDSa.L> and Total <TOTF.PA> were between 0.1 and
0.5 percent lower.
TecDAX-listed wind turbine maker Nordex <NDXGk.DE> shed 15
percent after it issued a profit warning.
"Although we had anticipated a cut to guidance in our
initiation report, the cut is larger than we expected and we see
scope for reducing our earnings forecasts by further 10
percent," analysts at Commerzbank said in a note to clients.
(Editing by David Cowell)
