REFILE-U.S. rally, oil gains lift European stocks
(Clarifies sixth paragraph, "being granted" not "granting"
* FTSEurofirst 300 ends 0.95 percent higher
* Energy stocks add most points to index
* Banks continue to fall, down 60 pct this year
LONDON, Nov 18 (Reuters) - European shares ended higher after a choppy session on Tuesday, helped by gains in energy shares and a rally on Wall Street on reassuring results from Hewlett-Packard (HPQ.N), but weak financials capped advances.
The pan-European FTSEurofirst 300 .FTEU3 index ended 0.95 percent higher at 845.37 points, after trading in a wide range from 818.78 to 847.35. But for every company whose shares rose, one declined.
Oil shares added most points to the index as crude CLc1 steadied above $55.50 a barrel. Total (TOTF.PA), Shell (RDSa.L) and BP (BP.L) added 3.9 to 4.6 percent.
Pharmaceutical stocks seen as good defensives in volatile times also gained, with GlaxoSmithKline (GSK.L) rising 4 percent and Novartis (NOVN.VX) putting on 1.9 percent.
But banks were broadly weaker.
Britain's HBOS HBOS.L fell 15.4 percent as investors bet against alternatives to its takeover by Lloyds TSB (LLOY.L) after the UK finance minister seemed to shut the door on an alternative scheme being granted access to the government's industry recapitalisation funds.
BNP (BNPP.PA) ended 5.1 percent lower on fresh talk of a capital increase. The bank declined to comment.
Allied Irish (ALBK.I) slid 14.5 percent after Moody's placed the group on review for a possible credit rating downgrade, while Anglo Irish ANGL.I tumbled 19 percent.
Analysts said that volatility continued to be so high that a one-day gain meant little in the overall context.
"We could be at the early stages of a bottoming process but worldwide we are still moving in a very wide range," said John Haynes, strategist at Rensburg Sheppard Investment Management.
"We've done all we can to plug holes in the financial system but now we need to subsidise consumers and get the banks to lend," he said.
"Spraying money at a handful of financial institutions is easier than directing tax dollars to individuals, whose behaviour when they get those cheques is less predictable than that of the institutions," he said.
Across Europe, Britain's FTSE 100 .FTSE gained 1.9 percent, Germany's DAX .GDAXI rose 0.5 percent and France's CAC .FCHI gained 1.1 percent.
BLEAK YEAR, FROM BANKS TO MINERS
The FTSEurofirst 300 has fallen 44 percent this year, punctured by a credit crisis that piled up losses at banks and pushed several economies into recession.
The International Monetary Fund said that more countries were seeking its help in coping with the economic crisis every day and Japan's economy minister said recession in the world's second biggest economy could last longer than feared.
Several sectors have been badly hit. Banks, the most obvious victims, are down more than 60 percent year to date but so are mining stocks, the darlings of the early part of the year, as demand worries grow.
"A number of financial institutions still need fresh capital, and the prospect of a prolonged recession is also heightening fears over their businesses: a wave of default is unavoidable, and that will hit banks' results," said Jean-Claude Petit, head of equities at Barclays Wealth Managers France.
In the United States and Britain, measures of inflation fell sharply, paving the way for further rate cuts.
Stock in financial group Fortis (FOR.BR) fell 11.6 percent and were suspended ahead of a ruling by Belgian court on its bailout package. The court rejected a challenge by shareholders to the state-backed rescue.
Among gainers, Alcatel-Lucent (ALUA.PA) rose 4.8 percent, gaining ground on the news that the French telecoms gear maker is in talks to sell its 20.8 percent stake in radar maker Thales (TCFP.PA) to French warplane maker Dassault Aviation (AVMD.PA). (Additional reporting by Blaise Robinson in Paris; Editing by David Cowell)
