European stocks rise as commodities shares support

FRANKFURT, Nov 7 (Reuters) - European shares rose in early trade on Friday, as commodities stocks tracked stronger crude and metals prices and banking shares gained following interest rate cuts in the previous session.

The FTSEurofirst 300 index of leading European shares rose 1.2 percent by 0823 GMT, after falling 5.8 percent in the previous session.

"We expect the rescue packages of governments for the banking system, global rate cuts by central banks and the latest recovery of share prices to have at least trimmed fears," said Ralph Solveen, an economist at Commerzbank in Frankfurt.

Oil and gas producers were among the top gainers, as oil hovered above $60 a barrel, up 0.5 percent, bouncing back from a previous low of $59.97, its lowest since March 22, 2007.

BP (BP.L: Quote, Profile, Research, Stock Buzz) rose 2 percent, ENI (ENI.MI: Quote, Profile, Research, Stock Buzz) was 0.5 percent higher, while Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) was up 0.30 percent.

Some analysts said the rate cuts could now be reassuring investors.

Positive news also came from Germany, where data showed that the fortunes of German exporters revived slightly in September, with the first monthly increase in exports in three months. [ID:nL7716281]

Defensive pharmaceuticals were higher, with Shire (SHP.L: Quote, Profile, Research, Stock Buzz) climbing 2.6 percent, Merck (MRCG.DE: Quote, Profile, Research, Stock Buzz) rising 1 percent, and Glaxosmithkline (GSK.L: Quote, Profile, Research, Stock Buzz) 1.7 higher.

In the U.S., stocks fell in the previous session with poor corporate outlooks and bleak sales from major retailers fuelling fears of a worsening economic downturn, while in Asia, Japan's Nikkei index .N225 closed 3.6 percent lower on Friday.

Investors are waiting for the latest U.S. non-farm payrolls report, due at 1330 GMT, which is widely expected to show the world's largest economy continuing to bleed jobs. The median forecast of economists polled by Reuters last week is for payrolls lossess of 200,000 in October. [ID:nN05288837] (Reporting by Sarah Marsh)