Europe stocks rise after Fed CP funding facilitiy

LONDON, Oct 7 (Reuters) - European shares extended gains on Tuesday after the U.S. Federal Reserve announced the creation of a special-purpose facility to begin buying commercial paper in yet another emergency move aimed at calming financial markets.

By 1314 GMT, the FTSEurofirst 300 of top European companies was up 2 percent at 1,025.02 points, after trading at 1,006.99 before the announcement.

Oil and gas were the top performing sector on the index, with BP (BP.L: Quote, Profile, Research) up 5 percent and Total (TOTF.PA: Quote, Profile, Research) rising 5.4 percent.

UBS (UBSN.VX: Quote, Profile, Research) gained 1.8 percent, Santander (SAN.MC: Quote, Profile, Research) advanced 4.3 percent and BNP Paribas (BNPP.PA: Quote, Profile, Research) climbed 5 percent. But Royal Bank of Scotland (RBS.L: Quote, Profile, Research) slumped nearly 22 percent and HBOS (HBOS.L: Quote, Profile, Research) shed 14.6 percent. (Reporting by Dominic Lau)