* FTSEurofirst 300 recovers, up about 1 percent
* Miners buoyed by better-than-expected Alcoa earnings
* Banks rebound after Fed's Bernanke comments
By Blaise Robinson
PARIS, July 9 (Reuters) - European stocks rose in early
trade on Wednesday, paring some of the previous session's sharp
losses after reassuring comments from the Fed chairman helped
spark a rally in equities worldwide.
But investors remained cautious as tensions surrounding
Iran's nuclear programme pushed oil prices higher after
Tuesday's losses. Iranian state media reported that the country
had test-fired missiles that could reach Israel and U.S. bases
in the region.
Miners were among the biggest gainers, with Xstrata <XTA.L>
up 1.3 percent and BHP Billiton <BLT.L> up 1.6 percent, after
U.S. aluminium producer Alcoa <AA.N> posted
stronger-than-expected results late on Tuesday.
At 0827 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.9 percent at 1,171.77 points. The
benchmark index, which is down 22 percent on the year, lost 1.5
percent on Tuesday.
"(Fed Chairman Ben) Bernanke's remarks overnight that said
the Fed would further help the devastated financial sector
pushed U.S. financial stocks substantially higher," said Franz
Wenzel, strategist at AXA Investment Managers, in Paris.
"It's been a fairly oversold situation, and I wouldn't rule
out a relief rally at this point," Wenzel said.
Bernanke said the U.S. central bank may keep an emergency
lending facility for big Wall Street firms open longer than it
initially intended, sparking sharp gains among U.S. banking
stocks.
European banks followed, with Credit Agricole <CAGR.PA> up
3.9 percent, Barclays <BARC.L> up 3.4 percent, and UBS <UBSN.VX>
up 3.9 percent.
Banking stocks have been hit over the past year by concerns
about the impact of a meltdown in the risky U.S. subprime
mortgage market which has forced many banks to unveil major
asset writedowns and emergency capital injections.
The DJ Stoxx bank index <.SX7P> is down 34 percent in 2008,
Europe's worst performing sector for the year to date.
Around Europe, Germany's DAX index <> was up 0.8
percent, Britain's FTSE 100 index <> rose 1 percent and
France's CAC 40 <> gained 0.7 percent.
Renault <RENA.PA> inched lower, down 0.5 percent, after the
French car maker downgraded its 2008 sales volume growth target,
citing economic uncertainty, after first-half worldwide unit
sales of 4.3 percent.
"The stock dropped yesterday so the profit warning was
already priced in," said Frederic Hamm, portfolio manager at
Agilis Gestion.
InBev NV <INTB.BR> shed 1.7 percent after Anheuser-Busch Cos
Inc <BUD.N> said it was suing InBev in an attempt to slow its
suitor's efforts to replace the U.S. brewer's board of
directors, which rejected InBev's $46.3 billion takeover offer.
WPP Group <WPP.L> lost 2.6 percent after the world's
second-largest advertising company launched a hostile bid worth
1.08 billion pounds ($2.13 billion) for British market research
firm Taylor Nelson Sofres (TNS) <TNS.L>.
Taylor Nelson Sofres rose 5.3 percent.
(Additional reporting by Sudip Kar-Gupta; editing by Rory
Channing)
