Finance & Stock Market News

By Simon Falush

LONDON, Dec 1 (Reuters) - European shares rose on Tuesday,

bouncing back from falls in the previous session, as fears eased

about the fallout from Dubai's debt problems and investors'

appetite increased for relatively risky equities.

Banks and commodity stocks provided the bulk of the gains

for the index as investors piled back into assets perceived as

sensitive to economic recovery.

By 0930 GMT, the FTSEurofirst 300 was 1.8 percent

higher at 1,005.72, having fallen 1.4 percent in the previous

session.

Efforts by Dubai World to restructure about $26 billion in

debt reassured investors that its debt problems can be

contained.

Markets took a beating last week after Dubai said it would

ask creditors of Dubai World and Nakheel to agree to a

standstill on billions of dollars of debt as a first step to

restructuring.

'The market is acknowledging that the Dubai crisis is

contained to the region itself,' said Heino Ruland, strategist

at Ruland Research, in Frankfurt.

Banks were among the strongest gainers, with Barclays , HSBC, Deutsche Bank and BNP

Paribas up between 1.6 and 2.7 percent.

Greek banks, which were hit hard last week on worries over

funding, were the biggest beneficiaries of the returning risk

appetite.

EFG Eurobank and National Bank of Greece

added 5.3 and 5.8 percent respectively.

'Banks in the U.S. rallied in the last hour of trade and that

optimism has been transferred to Europe,' said Ruland.

Investors also drew comfort from German jobless data,

showing an unexpected fall in unemployment in November, and

after euro zone PMI was revised higher.,

The Bank of Japan said it would pump more cash into the

banking system after an emergency meeting it called on Tuesday.

Miners were firmly in positive territory as gold held

steady, while base metals gained ground. Rio Tinto,

Xstrata, Lonmin, Anglo American,

Kazakhmys and BHP Billiton added 2.3 to 3.2

percent.



ENERGY BOOST

Energy stocks benefited from a rise in crude to just

below $78 per barrel.

BG Group, BP, Royal Dutch Shell,

Repsol and Total added 1.3 to 2.7 percent.

Alstom was near the top of the European

leaderboard, up 5.9 percent after it emerged that, with

Schneider, it is in exclusive talks with Areva to buy the nuclear reactor maker's transmission and

distribution unit.

Areva added 0.7 percent while Schneider gained 4 percent.

Among a relatively small list of losers, EADS fell

1.6 percent after HSBC downgraded it to 'underweight' from

'neutral' in a note on the aerospace sector.

Britain's FTSE 100, Germany's DAX and

France's CAC 40 were up between 1.6 and 1.9 percent.

Investors awaited U.S. ISM manufacturing data for November

and U.S. pending home sales data for October, both due at 1500

GMT.

(Editing by David Holmes)

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(simon.falush@reuters.com; +44 20 7542 7681; Reuters Messaging: simon.falush.reuters.com@reuters.net)

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