* FTSEurofirst 300 index up 1.5 pct
* Automobiles gain on French merger talk
* Banks recover from earlier losses
By Joanne Frearson
LONDON, March 11 (Reuters) - European shares rose early on
Wednesday, led by banks and miners and a rise in U.S. index
futures, while French auto stocks rose on merger talk.
By 1026 GMT, the FTSEurofirst 300 <> index of top
European companies was up 1.5 percent at 701.31 points after
being down as much as 681 points. On Tuesday the index rose 5.1
percent, the biggest one-day percentage gain in three months.
UBS <UBSN.VX> was up 3.4 percent rebounding from earlier
losses after it said its 2008 net loss had risen to 20.9 billion
Swiss francs ($18.06 billion) from the previously reported 19.7
billion francs. [].
"So weak of late ... the market has been latching on to the
idea that financials have priced in the worst. The market has
digested UBS and decided they are not as bad as expected," said
Bernard McAlinden, strategist at NCB Stockbrokers.
The banking sector was recovering from earlier falls to
become the major gainers on the index.
Italy's Banco Popolare <BAPO.MI> was up 20.6 percent,
supported by Tuesday's announcement it wants to issue 1.45
billion euros bonds to the state to support its capital ratios
and delist its affiliate Banco Italease <BIL.MI>.
Credit Suisse <CSGN.VX>, BNP Paribas <BNPP.PA>, Banco
Santander <SAN.MC>, Barclays <BARC.L> and UniCredit <CRDI.MI>
were 2.6 to 7.9 percent higher.
HSBC <HSBA.L> slumped 8.5 percent as investors continued to
short-sell the stock while others bailed out ahead of its $18
billion rights issue.
The automobile sector contributed to major gains on the
index. French carmaker Renault <RENA.PA> soared 8.3 percent and
Peugeot <PEUP.PA> was 7.2 percent higher on market talk of a
merger between the groups, traders said.
Both companies declined to comment.
Nokia <NOK1V.HE> soared 6.2 percent after the group unveils
its new music phones.
ENERGY TICKS UP
The energy sector were also recovering from earlier losses.
BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell <RDSa.L> and Total
<TOTF.PA> were up 0.8-1.5 percent.
Italian oil and gas group ENI <ENI.MI> was 0.07 percent
higher following earlier falls on market talk of a rights issue,
according to four traders, which was dismissed by analysts and
industry sources.
ENI declined to comment.
British oil explorer Cairn Energy <CNE.L> was down 3.9
percent after it said it has launched a share placing
representing up to 5 percent of its share capital, which could
raise around 120 million pounds ($165.9 million), based on
Tuesday's closing price. []
JCDecaux <JCDX.PA>, slumped more than 13.1 percent after the
world's second-largest outdoor advertising group, warned its
sales would decline this year amid a global economic slump, and
said it would pay no 2008 dividend, after posting lower 2008
earnings. []
Looking at economic news, China's exports tumbled in
February and Japan's wholesale prices fell by the most in six
years, stark illustrations of a bleak world economy.
[]
Across Europe, the FTSE 100 <> index was up 0.7
percent, Germany's DAX <> was 1.9 percent higher and
France's CAC 40 <> was up 1.7 percent.
(Editing by Hans Peters)
