* FTSEurofirst 300 up 1.6 pct, after Monday’s 3.9 pct drop
* M&S surges 11 pct after better-than-feared results
* Banks rise, brushing aside Fortis’s huge loss
* For up-to-the-minute market news, click on [STXNEWS/EU]
By Blaise Robinson
PARIS, March 31 (Reuters) - European stocks gained ground in early trade on Tuesday in a broad rally clawing back a portion of the past two sessions’ sharp losses as investor focus turned to a meeting of G20 world leaders.
British retailer Marks & Spencer MKS.L surged 11 percent after posting a smaller-than-expected fall in underlying fourth-quarter sales, saying it was turning around its troubled food business and holding market share in clothing.
At 0832 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 1.6 percent at 720.58 points. The index, which sank 3.9 percent on Monday, is down 14 percent in 2009, hit by the deepening global economic downturn as well as fears over the health of the banking system.
“The macro landscape has been stabilising, which has helped equities bounce back from historical lows. But to really improve market sentiment, we need to see the data improving and not just stabilising,” said Jacques Henry, analyst at Louis Capital Markets, in Paris.
Embattled financial group Fortis FOR.BR rose 6 percent after posting a 28 billion euro loss in 2008 due to massive negatives from banking activities stripped out by the Belgian and Dutch states.
The news didn't prevent banking stocks rising, with Barclays BARC.L up 2.6 percent, UBS UBSN.VX up 4.5 percent, and BNP Paribas BNPP.PA, which is poised to take over a big chunk of Fortis, up 1.8 percent.
On the downside, German carmaker Porsche PSHG_p.DE fell 5.5 percent as the company's net debt figure, which it released together with better-than-expected first-half results, was seen as negative.
“Net debt of 9 billion euros from our point of view is a clear disappointment, especially after statements by the CFO at the Geneva Motorshow some weeks ago,” DZ Bank analyst Michael Punzet said in a note.
The FTSEurofirst 300 .FTEU3 index of top European shares is on track to end the month of March mostly unchanged. The index, beaten down in the first part of the month, has gained nearly 12 percent since reaching an all-time low on March 9.
U.S. President Barack Obama was heading to Europe on Tuesday with a hefty agenda for tackling the economic crisis, and will stop first in London where he will attend the summit of the Group of 20 major economies on Thursday.
Investors hope the leaders will agree on further coordinated measures to revive the world economy.
Japanese Prime Minister Taro Aso was expected to outline a new stimulus plan for the world’s second-largest economy later on Tuesday as rising unemployment and falling spending showed Japan was still stuck in its worst recession in 60 years.
On the data front, investors will keep an eye on U.S. consumer confidence monthly figures, due at 1400 GMT. The data, which will shed light on the outlook for the recession-hit economy, is expected to have edged up in March from the record low hit in February. (Additional reporting by Christoph Steitz in Frankfurt; Editing by Dan Lalor)