Nestle, banks buoy Europe shares, data overshadows

LONDON, Feb 21 (Reuters) - European shares rose on Thursday, led by banks, as results from the likes of Nestle (NESN.VX: Quote, Profile, Research) also helped underpin the market but shares pared gains towards the close on fresh signs of a struggling U.S. economy.

Nestle was the biggest weighted gainer on the broader market, rising by 3.5 percent after the world's largest food company defied record prices for ingredients such as milk and cocoa and posted a 15.8 percent rise in net profits for 2007.

The FTSEurofirst 300 index provisionally closed up 0.7 percent at 1,330.08, off the day's highs as a U.S. regional business conditions index reinforced fears of a recession.

But banks were the top gainers on the index, heartned by the Federal Reserve minutes in the previous session suggesting the U.S. central bank could cut rates further and the fact that results from the scandal-ridden Societe Generale (SOGN.PA: Quote, Profile, Research) did not contain any new nasty surprises.

BNP Paribas (BNPP.PA: Quote, Profile, Research), Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Deutsche Bank (DBKGn.DE: Quote, Profile, Research) were up between 0.7 and 3.4 percent.

But Societe Generale (SOGN.PA: Quote, Profile, Research) fell 2.8 percent as it confirmed a record fourth-quarter loss of 3.35 billion euros after absorbing a huge rogue trading scandal that has made it a potential takeover target.

Around Europe, Germany's DAX .GDAXI underperformed other national indices, ending flat, while Britain's FTSE 100 .FTSE was up 0.7 percent and France's CAC 40 .FHCI gained nearly 1 percent. (Reporting by Ana Nicolaci da Costa)