RTRS: Oils, autos lead Europe stocks higher at midday
* FTSEurofirst 300 index up 1.2 percent
* Oils rise as crude pares losses
* Automobiles up on U.S. bailout hopes
By Brian Gorman
LONDON, Dec 9 (Reuters) - Rising hopes within the automobile sector of a bailout package from the U.S. government and gains in oils on recovering crude prices pushed European shares higher by midday on Tuesday.
At 1201 GMT, the pan-European FTSEurofirst 300 .FTEU3 index was up 1.2 percent at 858.37 points after earlier being down as low as 835.69 points. It rose 6.9 percent on Monday.
But the index has lost more than 43 percent this year, hurt by a credit crisis that has helped push several major economies into recession.
Oils extended gains from Monday, when crude prices CLc1 gained sharply. Crude was down 0.5 percent late morning, at $43.58 a barrel, paring losses from earlier in the session.
Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), ENI (ENI.MI: Quote, Profile, Research, Stock Buzz), BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), and Repsol (REP.MC: Quote, Profile, Research, Stock Buzz) were up between 1.8 and 3 percent.
Elsewhere on the macro front, British industrial output fell at its sharpest pace in nearly six years in October and revisions to previous monthly data could mean the economy shrank even faster in the third quarter than initially thought.
"Ultimately, equities are reacting positively to what has been some pretty awful data. UK industrial production couldn't have been much worse. It does seem that the market is now geared towards poor data," said Neil Parker, strategist at Royal Bank of Scotland.
"Some of the data is moving towards a position of stability. With the (UK) retail sales figures, a fall in 0.4 percent year-on-year wasn't that bad. The rally should persist, provided there's no bad news out of the U.S."
Autombiles gained on renewed optimism on a bailout package for struggling manufacturers in the United States.
Congressional Democrats and the White House have been in talks for several days to finalise an emergency loan package estimated to be worth up to $15 billion to prevent the collapse of GM (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler. Chrysler LLC [CBS.UL] chief executive Bob Nardelli said on Monday he was encouraged by developments regarding federal aid.
BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz), Daimler (DAIGn.DE: Quote, Profile, Research, Stock Buzz), Fiat (FIA.MI: Quote, Profile, Research, Stock Buzz) and Volkswagen (VOWG.DE: Quote, Profile, Research, Stock Buzz) were up between 3.7 and 6.3 percent.
