Europe shares gain early as Rio Tinto, BHP surge

                                
 * FTSEurofirst 300 rises 0.7 pct, reversing Thursday's dip
                                
 * Rio Tinto jumps 10 pct after scraps Chinalco tie-up
                                
 * Energy stocks rise along with crude prices
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]

                                
 By Brian Gorman
                                
 LONDON, June 5 (Reuters) - European shares rose in early
trade on Friday, with Rio Tinto <RIO.L> leading miners higher
after scrapping a planned tie-up with Chinalco and banks
tracking gains for the sector on Wall Street.
                                
 At 0825 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was up 0.7 percent at 872.41 points.
Rio Tinto rose 10.2 percent, more than reversing Thursday's
6.6 percent decline, after it announced a deeply discounted
$15.2 billion rights issue, and scrapped plans for a tie-up with
China's Chinalco [ID:nSYD73514].
                                
 "Before when Rio was stuck in a debt bind, risk aversion was
high, they couldn't get the money," said Bernard McAlinden,
investment strategist at NCB Stockbrokers, in Dublin. "But now,
the shareholders are willing to put up the money and they can
avoid the dilution there would have been with Chinalco."
                                
 Other miners rose, while copper prices traded near their
highest level in more than seven months. BHP Billiton <BLT.L>,
which will increase its stake in a joint venture with Rio, rose
9.9 percent.
                                
 Anglo American <AAL.L>, Antofagasta <ANTO.L> and Vedanta
<VED.L> rose between 3.8 and 4.9 percent.
                                
 Oil producers gained ground after the price of crude <CLc1>
settled at $68.81 a barrel in New York on Thursday, its highest
close since Nov. 4.
                                
 Total <TOTF.PA>, BP <BP.L> and StatoilHydro <STL.OL> added
between 1.2 and 2.5 percent.
 Banks gained after Citigroup upped its price target for U.S.
giant JP Morgan <JPM.N>, saying it saw the bank's commercial
real estate losses as manageable.
                                
 BNP Paribas <BNPP.PA>, Banco Santander <SAN.MC>, Credit
Suisse <CSGN.VX>, Deutsche Bank <DBKGn.DE>,  Societe Generale
<SOGN.PA>, UBS <UBSN.VX> and UniCredit <CRDI.MI> rose between
1.2 and 3.3 percent.
                                
 Across Europe, Britain's FTSE 100 <.FTSE>, Germany's DAX
<.GDAXI> and France's CAC-40 <.FCHI> were up between 0.6 and 1.6
percent.
                                
 
                                
 RENEWABLE FALLS
                                
 Norwegian solar industry group Renewable Energy Corp (REC)
<REC.OL> fell 9.1 percent after saying it would postpone a
rights issue by about three weeks and increase it to 4.5 billion
crowns ($713.5 million) from 4 billion.
                                
 It also said the solar products market remained weak.
[ID:nL41050345]
                                
 Brewer Carlsberg <CARLb.CO> rose 4.6 percent after Goldman
Sachs upped its target price to 458 Danish crowns, from 350,
repeating its "buy" stance.
 The European benchmark index is up more than 35 percent from
the lifetime low it hit on March 9, as investors have become
more confident on the prospects for economic recovery. 
                                
 Later in the day, investor focus will switch to the non-farm
payroll data in the United States, with the rate of job losses
expected to decline.
                                
 "The market is vulnerable to any suggestion that the
economic recovery is not on track," said McAlinden.
  (Reporting by Brian Gorman; Editing by Erica Billingham)