European shares rise on fiscal stimulus hopes

LONDON Jan 6 (Reuters) - European shares rise in early trade on Tuesday as investors hope that fiscal stimulus plans by U.S. President-elect Democrat Barack Obama and the German government will help a recovery in equities. By 0812 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.5 percent at 877.7 points.

"The main things are the Obama plans as well as the German fiscal stimulus package. Markets, rather than focusing on the dire economic and earnings data, are looking forward to the hope that these plans will work," said Bernard McAlinden, market strategist at NCB Stockbrokers.

In the U.S., Barack Obama went to Congress two weeks before taking office to try to entice Republican support for a massive stimulus package with talks of big tax cuts.

Meanwhile, German senior officials said the government's second fiscal stimulus could reach 50 billion euros nearly double the amount expected just a week ago.

The pharmaceutical sector led the risers on the index. AstraZenenca (AZN.L), GlaxoSmithKline (GSK.L) and Sanofi-Aventis (SASY.PA) were up between 1.1-1.9 percent. The automobile sector performed well after heavy losses on Monday. Renault (RENA.PA), BMW (BMWG.DE) and Porsche (PSHG_p.DE) were between 0.1-2.1 percent higher.

Across Europe, the FTSE 100 .FTSE index was up 0.2 percent, Germany's DAX .GDAXI was 0.3 percent higher and France's CAC 40 .FCHI was up 0.25 percent. (Reporting by Joanne Frearson)