* Europe's FTSEurofirst 300 gains 0.8 percent
* Banks lifted as risk appetite firms
* Commodity stocks lifted by stronger metal, energy prices
* For up-to-the-minute market news, click on []
LONDON, Oct 6 (Reuters) - European shares rose in early
trade on Tuesday, adding to gains in the previous session as
further evidence of global economic recovery boosted demand for
riskier assets like equities.
U.S. data on Monday showed its services sector expanded for
the first time since 2008, while an interest rate rise by
Australia's central bank signalled some policymakers were
confident the recovery was gathering pace.
By 0806 GMT the FTSEurofirst 300 <> was up 0.8 percent
at 979.06 points, after closing 0.8 percent higher on Monday.
The index, which posted its best quarterly performance in
nearly 10 years in the three months to the end of September, had
started the fourth quarter on shaky ground after soft data shook
confidence.
But the U.S. services data once again led investors to
believe a significant recovery was coming through.
Banks <.SX7P>, typically strong beneficiaries of recovering
risk appetite, were among the strongest performers.
Barclays <BARC.L>, HSBC <HSBA.L>, Standard Chartered
<STAN.L>, BNP Paribas <BNPP.PA> and Deutsche Bank <DBKGn.DE>
added 1 percent to 2.4 percent.
But Societe Generale <SOGN.PA> fell 0.7 percent after
unveiling a 4.8 billion euro ($7.0 billion) capital hike to
repay state support and pursue acquisitions, following domestic
peer BNP Paribas in paying off aid received during crisis.
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"U.S. equities gained about half a percent more after Europe
closed (on Monday) ... and shares came off so much on Thursday
and Friday that investors are turning an eye to bargain
hunting," said Josh Raymond, market strategist at City Index.
Insurers were also supported by increasing optimism on the
outlook for the global economy. Aegon <AEGN.AS>, ING Groep
<ING.AS>, Legal & General <LGEN.L> and Prudential <PRU.L> rose
up to 3 percent.
MINERS, ENERGY GAIN
Miners were firmer as a weaker dollar helped to boost metal
prices. The U.S. unit was pressured by a British newspaper
report that Gulf Arab states were in secret talks to end the use
of dollars in oil trading.
A Saudi offical said the report was "absolutely incorrect",
while Russia's deputy finance minister, Dmitry Pankin, said the
dollar had not been discussed. [] []
Rio Tinto <RIO.L>, Xstrata <XTA.L>, Lonmin <LMI.L>, Anglo
American <AAL.L>, Kazakhmys <KAZ.L> and Fresnillo <FRES.L>
gained 2.2-4.7 percent.
Energy stocks were lifted as crude rose towards $71 per
barrel. BG Group <BG.L>, BP <BP.L>, Royal Dutch Shell
<RDSa.L>,and Total <TOTF.PA>, Tullow Oil <TLW.L> and ENI
<ENI.MI> added 0.1-1.6 percent.
Around Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC <> were up 0.4-0.6 percent.
Tesco <TSCO.L>, the world's third largest retailer, fell 1
percent after posting slightly weaker than expected
second-quarter sales, offsetting first-half profit towards the
top end of forecasts. []
Defensive pharmaceutical stocks were among the main drags on
the index, as investors repositioned towards more cyclical
stocks. AstraZeneca <AZN.L>, GlaxoSmithKline <GSK.L>, Merck
<MRCG.DE> and Sanofi-Aventis <SASY.PA> fell 0.3-1.2 percent.
Shire <SHP.L> was among the top fallers, shedding 2.3
percent after UBS cut its rating for the drugmaker to 'neutral'
from 'buy', citing valuation grounds.
Other stocks seen as relatively defensive plays like
Unilever <ULVR.L> and Vodafone <VOD.L> also fell, down 0.8
percent and 0.5 percent respectively.
(Reporting by Simon Falush; Editing by Dan Lalor)
