European Shares Jump As Barclays Surges 73 Pct

But analysts said the financial sector might continue to struggle this quarter, despite a surge on Monday.

 European shares jumped on Monday, snapping a five-session losing streak, as a 73-percent surge in British bank Barclays boosted embattled financials, while oil shares tracked firmer crude prices.

The FTSEurofirst 300 index of leading European shares provisionally closed 3 percent higher at 783.09 points after falling in 12 of the previous 13 sessions.

Other financial stocks also spiked, with Lloyds jumping 33 percent, ING up 25 percent, Royal Bank of Scotland rising 22 percent, BNP Paribas up 14 percent and Societe Generale rising 10.5 percent.

Pfizer's $68 billion acquisition of rival Wyeth also boosted market sentiment, with analysts saying the takeover opened the possibility of more deals ahead as companies seek to position themselves defensively in the midst of a faltering economy.

But analysts said the financial sector might continue to struggle this quarter, despite a surge on Monday.

"There is company-specific reassurance coming out but given the quantum of the mark-downs we saw last week -- things never tend to go down in a straight line -- it was fair to anticipate a rebound," said Jonathan Lawlor, head of European research, Fox-Pitt, Kelton.

"The key question would be the extent to which we can hold on to the rebound. And broadly speaking we remain cautious on the banking sector ... not forgetting that we have to go through year-end results," he added.

Barclays said it had no need to raise capital and remained profitable despite an 8 billion pound ($11 billion) 2008 writedown.

Oil shares also gained with a 3 percent rise in crude prices. Tullow Oil was up 9.6 percent, while Total gained 5.9 percent.

Across Europe, Britain's FTSE, Germany's DAX and France's CAC rose 3.5-3.9 percent.