* STOXX up 0.3 percent
* Miners, oil and autos among top gainers
* Staffing firms benefit from upgrades
* Italian index hits 6-week lows on political, bank worries
* Aixtron falls as U.S. regulator opposes China takeover
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By Alistair Smout and Danilo Masoni
MILAN, Nov 21 European shares rose on Monday,
helped by a rise in commodity prices as investors continued to
buy cyclical stocks and sell defensives on bets that the U.S.
presidential election result might revive inflation globally.
The pan-European STOXX 600 closed up 0.3 percent.
It rallied 0.5 percent last week, and is up 1.6 percent since
the surprise election of Donald Trump as president on Nov. 8.
While markets were volatile around the election, there is
hope that his planned fiscal stimulus will boost inflation. That
has helped to lift cyclical stocks that are sensitive to growth,
and hindered defensives - a trend which continued on Monday.
"Despite uncertainty on how Mr Trump's plans will affect
growth, the market expects further fiscal spending and as a
result cyclicals sectors have benefited," analysts at Goldman
Sachs said in a note.
Cyclical sectors such as basic resources, autos
and energy were among the top gainers, up
Oil shares were supported by a surge in the price of Brent
after it seemed that major oil producers were moving closer
towards an agreement to limit output.
Staffing - or recruitment and hiring - firms also rose,
after HSBC upgraded the sector. The likes of Ranstand,
Hays and Adecco were up 1.5-3.4 percent after
all were upgraded to "buy" from "hold".
"Staffing companies are as seen as natural inflation
hedges," analysts at HSBC said in a note.
"Donald Trump's proposals include cutting taxes and
increasing infrastructure spend. If carried out, the higher
fiscal spending should lead to a high inflationary environment
in coming years."
The rotation caused weakness in defensive stocks, with
pharmaceutical firms down 0.5 percent.
France's CAC closed up 0.6 percent, an outperformer
after former president Nicolas Sarkozy was surprisingly knocked
out of the running to be a presidential candidate in next year's
Worries that next month's Italian referendum on
constitutional reform could create political instability
hindered the Italian blue chip FTSE MIB, which
It dropped to hit its lowest point since end-September as
investors priced in a possible rejection of Prime Minister
Matteo Renzi's reform plan.
However the index later recovered to close 0.2 percent
higher, though lagging French and Portuguese indexes.
Investors are concerned that if Renzi loses the referendum,
as current polls forecast, the Italian government would fall
into a serious crisis, threatening to destabilise the whole euro
zone ahead of a string of national elections next year.
"The growing focus on political risk is contributing to
Italian assets' difficulties," said JCI Capital portfolio
manager Alessandro Balsotti. He noted how continued uncertainty
over multi-billion-euro capital increases at UniCredit
and Monte dei Paschi di Siena had also been weighing.
German chip designer Aixtron fell more than 5
percent after a U.S. regulator acted to stop a planned Chinese
takeover. The move raised concerns that the deal
would not go through.
"It is totally unclear whether the acquisition by Chinese
investors will take place," said DZ Bank analyst Harald
Schnitzer, who has a sell rating on the stock.
(Editing by Mark Heinrich)