* FTSEurofirst 300 up 1.6 pct early on
* Banks lead on news of U.S. TARP repayments
* Oil at $71 a barrel lifts energy stocks
* For up-to-the-minute market news, click on []
By Farah Master
LONDON, June 10 (Reuters) - European stocks rose in early
trade on Wednesday, with banks leading on news that top U.S.
banks have been cleared to repay state aid and oil majors
boosted by a jump in crude oil above $71 a barrel.
At 0814 GMT, the FTSEurofirst 300 <> index of top
European shares was up 1.6 percent at 883.58 points.
The benchmark index has gained around 37 percent since its
lifetime low on March 9 as investors have become more confident
on the prospects for economic recovery.
Banking shares were the leading gainers with Deutsche Bank
<DBKGn.DE>, Lloyds Banking Group Plc <LLOY.L>, Spain's Banco
Santander <SAN.MC>, France's Societe Generale <SOGN.PA> and HSBC
<HSBA.L> up between 2.1 and 3.4 percent.
"The decision of the U.S administration yesterday to allow
some banks to repay the TARP funds is perceived as a sign of
further stabilisation and a sign of normalisation within the
banking crisis," said Tammo Greetfeld, equity strategist at
Unicredit Group, "and it alleviates some of the strongest
concerns."
The banks will be free from restrictions on executive
compensation, dividend payments and share purchases once they
buy back their preferred shares from the U.S. government.
[]
Oil <CLc1> hit a new seven-month-high above $71 a barrel,
after an American Petroleum Institute report showed that U.S.
inventories fell more than forecast. Crude prices have doubled
since February [].
Total <TOTF.PA>, ENI <ENI.MI>, BP <BP.L> and StatoilHydro
<STL.OL> rose between 1.3 and 1.7 percent.
"Around these levels, it's good to see oil rise, but we
wouldn't want it to go any further," said Bernard McAlinden,
investment strategist at NCB Stockbrokers, in Dublin, citing
inflationary concerns.
So far this year, the DJ STOXX European banking index
<.SX7P> has risen 1.9 percent, the energy index <.SXEP> has
gained 1.9 percent and the basic resources index <.SXPP>, home
of Europe's mining and steel stocks, is up 3.8 percent.
Around Europe on Wednesday, the UK's FTSE 100 index <>
was up 1.5 percent, Germany's DAX index <> was ahead 1.7
percent and France's CAC 40 <> advanced 1.5 percent.
Mining shares tracked commodity prices higher. Eurasian
<ENRC.L> was up 8 percent, Rio Tinto <RIO.L> gained 3.5 percent
and Antofagasta <ANTO.L> put on 4.3 percent.
Spanish clothing group Inditex <ITX.MC>, owner of fashion
chain Zara, rose 5.8 percent despite reporting first quarter net
profit of 184 million euros ($255.3 million), just below a
Reuters forecast of 187 million euros in a Reuters poll.
"The like-for-like performance across 1Q and the first 5
weeks of 2Q is materially better than we anticipated, and
continues to argue for Inditex's sharp outperformance of the
Spanish clothing market," Citgroup said in a note, keeping a
"buy" rating on the shares.
U.S. international trade figures are also due later in the
day, but the main U.S. focus will be the latest Fed Beige book,
set to be published after European market close.
(Additional reporting by Brian Gorman; Editing by David Cowell)
