* FTSEurofirst 300 rises 0.8 percent * Oils up as crude surges on OPEC cut expectations * Banks down on Madoff exposure By Brian Gorman LONDON, Dec 15 (Reuters) - European shares rose at midday on Monday, with oils gaining as crude rose on expectations of an OPEC production cut, more than offsetting banks that fell on worries about the sector's exposure to an alleged fraud. At 1142 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.8 percent at 836.05 points after rising as high as 843.89. The benchmark has lost more than 44 percent in 2008. Oil prices CLc1 rose more than 5 percent to $48.60 a barrel with OPEC Secretary General Abdullah al-Badri saying he expected a "very sizeable reduction" at this week's meeting in Algeria and that the market was oversupplied by about 100 million barrels. BP (BP.L: Quote, Profile, Research, Stock Buzz), Royal Dutch Shell (RDSa.L: Quote, Profile, Research, Stock Buzz), Total (TOTF.PA: Quote, Profile, Research, Stock Buzz), StatoilHydro (STL.OL: Quote, Profile, Research, Stock Buzz) and gas producer BG Group (BG.L: Quote, Profile, Research, Stock Buzz) rose between 1.5 and 5.1 percent. Across Europe, the FTSE 100 index .FTSE was up 1 percent; Germany's DAX .GDAXI rose 1.9 percent and France's CAC 40 .FCHI was 0.9 percent higher. Japan's Nikkei .N225 closed 5.2 percent higher on Monday despite the Bank of Japan's tankan survey gauging big manufacturers' sentiment suffering the biggest fall since the oil crises of the 1970s and the bleakest outlook since 2002 "Bad news is more than priced in," said Neil Parker, strategist at Royal Bank of Scotland. "That (the Tankan survey) would normally trigger a round of selling pressure". "We're expecting a further bounce for equities, with the FTSE 100 up towards 4,500 by the year-end with the CAC and the DAX up 100 to 150 points. The only thing out there that could derail equity gains is bad activity data - consumer spending and US retail sales (due in the next few days)." Markets also took heart from hopes that President Bush would rescue U.S. auto firms and prevent another major corporate collapse that could reverberate around the globe. Further, Fed fund futures pointed to a 76 percent probability of a 75-basis point U.S. Federal Reserve rate cut on Tuesday following a two-day meeting. Miners rose in line with higher metals prices. BHP Billiton (BLT.L: Quote, Profile, Research, Stock Buzz), Anglo American (AAL.L: Quote, Profile, Research, Stock Buzz), Vedanta Resources (VED.L: Quote, Profile, Research, Stock Buzz), Xstrata (XTA.L: Quote, Profile, Research, Stock Buzz), and Rio Tinto (RIO.L: Quote, Profile, Research, Stock Buzz) rose between 1.7 and 5.6 percent. BANKS FALL But banks fell after news Santander (SAN.MC: Quote, Profile, Research, Stock Buzz), BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz), and Swiss private bank Reichmuth & Co became the latest parties to detail possible losses over exposure to an investment fund run by U.S. investor Bernard Madoff. BNP Paribas shares fell 7.5 percent, Santander was down 0.6 percent and HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) slipped 2 percent. Trade in Fortis (FOR.AS: Quote, Profile, Research, Stock Buzz) shares were suspended, pending a statement on the financial impact of a court ruling suspending a state-led deal to dismantle Fortis and sell Belgian assets to BNP Paribas. [ID:nLF631594] However, Irish banks were some of the biggest gainers in the index, as a pledge from the country's government to bolster their capital with an injection of up to 10 billion euros ($13.47 billion) was welcomed by investors. [ID:nLE482222] Anglo Irish Bank (ANGL.I: Quote, Profile, Research, Stock Buzz) and Bank of Ireland (BKIR.L: Quote, Profile, Research, Stock Buzz) rose 19.4 and 15.9 percent respectively, while Allied Irish Banks (ALBK.I: Quote, Profile, Research, Stock Buzz) rose 4 percent. Electrolux (ELUXb.ST: Quote, Profile, Research, Stock Buzz), the world's second-biggest home appliances maker, slipped 5 percent after it warned that 2008 results would fall short of expectations and said it would cut more than 3,000 jobs globally. Automakers were mostly higher. BMW (BMWG.DE: Quote, Profile, Research, Stock Buzz), Daimler AG (DAIGn.DE: Quote, Profile, Research, Stock Buzz), Peugeot PEUP.PA, Fiat Futures for the Dow Jones DJc2, S&P S&Pc2 and Nasdaq 100 NDc2 were flat to 0.2 percent higher. ($1=.7426 euros) (Additional reporting by Atul Prakash; Editing by Mike Nesbit)

Source