Banks, commodities drive 1.7% rise in Europe shares

By Sitaraman Shankar

LONDON, April 16 (Reuters) - European shares ended sharply higher on Wednesday, driven by gains in banks after JPMorgan's (JPM.N: Quote, Profile, Research) results reassured worried investors, and by soaring commodity prices that lifted miners and oils.

The FTSEurofirst 300 index of top European shares ended 1.65 percent higher at 1,302.78 points, with the commodity and bank-heavy British FTSE 100 .FTSE a strong out-performer.

Rio Tinto (RIO.L: Quote, Profile, Research) rose 6 percent, Royal Bank of Scotland (RBS.L: Quote, Profile, Research) jumped 7.6 percent and Total (TOTF.PA: Quote, Profile, Research) gained 2.4 percent, making them the top weighted gainers on the pan-European benchmark.

The FTSEurofirst 300 has risen 3.2 percent so far in April, putting it on track for its first monthly gain since October, but it has been an erratic journey through the month, with six up days and six down days.

Analysts said the signals were still mixed, at best.

"We remain cautious -- this is still a bear market rally," said Fortis bank strategist Philippe Gijsels in Brussels.

"The main drivers are Intel (INTC.O: Quote, Profile, Research) and JPMorgan, which are putting into some doubt the thesis that started some days ago with bad figures from GE (GE.N: Quote, Profile, Research) and Alcoa (AA.N: Quote, Profile, Research), but we still think earnings will decline and guidance will come in lighter."

A relatively upbeat outlook from Intel late on Tuesday and strong earnings from LG Electronics (066570.KS: Quote, Profile, Research) helped the technology sector, where Nokia (NOK1V.HE: Quote, Profile, Research) rose 3.4 percent, and Infineon (IFXGn.DE: Quote, Profile, Research) soared 10 percent.