RTRS: Europe shares gain, but to end 2008 sharply lower
* FTSEurofirst 300 rises 1.7 percent
* Defensive stocks support, oils up
* Germany's DAX closes 2008 with 40 pct plunge
By Atul Prakash
LONDON, Dec 30 (Reuters) - European stocks rose on Tuesday on the back of traditionally defensive telecommunication and pharmaceutical shares, that were up at the tail end of the year, but 2008 was on track for one of the biggest overall falls ever seen.
The pan-European FTSEurofirst 300 index .FTEU3 closed 1.7 percent higher at 824.47 points, but the index is set to post a loss of about 46 percent in 2008.
Germany's benchmark DAX .GDAXI index gained 2.2 percent to end 2008 with a 40 percent plunge on the year, the second-deepest annual fall in its 20-year history. Trading on the DAX will resume on Friday, Jan 2.
The DAX, which rose 22 percent in 2007, tumbled along with stock markets around the world as turmoil in the financial sector spread to the real economy, triggering a sharp downturn and forcing governments to bailout a number of troubled lenders.
Japan's Nikkei stock average fell 42 percent in 2008, the biggest loss in its 58-year history, while in the U.S., the Dow Jones industrial average .DJI, the Standard and Poor's 500 Index .SPX and the Nasdaq Composite Index .IXIC have fallen 35-42 percent so far this year.
"The year has been horrible. Going forward, the margins will continue to come under pressure which is something analysts haven't yet factored in," said Franz Wenzel, strategist at AXA Investment Managers, in Paris.
"The first half of 2009 will be a rollercoaster area, but we think that the negative momentum will peter out in 2009 and give way for a positive outlook towards the end of next year."
The telecom sector added the most points to the FTSEurofirst index on Tuesday, with BT Group (BT.L), Vodafone (VOD.L), Cable and Wireless (CW.L) and Swisscom (SCMN.VX) up 0.7-4.5 percent.
Defensive drugmakers were also in demand. GlaxoSmithKline (GSK.L) was up 2.4 percent, Novartis (NOVN.VX) added 1 percent and Shire (SHP.L) gained 1.8 percent.
Around Europe, the FTSE 100 index .FTSE was 1.7 percent higher and France's CAC 40 .FCHI rose 2.8 percent.
