European shares rise in early trade; banks gain

August 29, 2011, Monday/ 10:35:00

European shares gained in early trade on Monday, tracking a late rally in Wall Street on Friday, as Federal Reserve chairman Ben Bernanke raised hopes for more stimulus for the economy at the U.S. central bank's September meeting.     

At 0706 GMT, the FTSEurofirst 300 index of top European shares was up 0.7 percent at 925.81 points, after falling 0.7 percent on Friday. The index has lost more than 17 percent so far in 2011.      

Trading volume was set to be lighter, with London markets closed for a holiday. 

Heavyweight banks to gain included Credit Suisse ,  Societe Generale and UBS , up between 2.9 percent and 3.4 percent. 

"It's one of these days when you go back to the underlying valuations of the companies - and say it looks good. We have oversold this market. It's a bounceback from lower prices, not based on anything fundamental. Bernanke has pushed it back to the politicians," Justin Urquhart Stewart, at Seven Investment Management, said.

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