LONDON, June 16 (Reuters) - European shares closed marginally higher on Tuesday, with falling banking shares offsetting a rise in defensive sectors amid mixed signals for economic recovery.
The FTSEurofirst 300 index of top European shares rose 0.03 percent to a provisional close of 863.61 points. The European benchmark index is up 33.8 percent from the lifetime low it hit on March 9. The index fell 2.5 percent on Monday and some analysts say the rise has gone too far, relative to the tangible evidence of an economic recovery.
"We've had a surge in equities, on the basis that there will be a recovery, but that hasn't been borne out by the data so far," said Jeremy Batstone-Carr, strategist at Charles Stanley, in London.
"Benchmark indexes are struggling to break through key resistance levels, with the exception of the Nikkei in Japan."
U.S. economic data was mixed on Tuesday.
New U.S. housing starts and permits rebounded in May from record lows as ground-breaking for multifamily units surged after tumbling the prior month, a government report showed.
But industrial production slid a steeper-than-expected 1.1 percent in May from the prior month with output off sharply at factories, utilities and mines, a Federal Reserve report showed.
Defensive stocks were the biggest gainers.
Tesco rose 2 percent after the world's third-biggest retailer posted its best quarterly sales rise in Britain for two years and said it was closing the gap on recent stronger growth rates at its main domestic rivals.
Telecoms rose, including Vodafone, up 1.6 percent.
Shares of NBG tumbled 10 percent after Greece's largest lender said its board would convene this week to decide on a rights issue of up to 1.25 billion euros.
Other financial institutions retreated, trimming some of their recent strong gains. UBS, Societe Generale and UniCredit shed between 2.4 and 4.1 percent. (Reporting by Brian Gorman)