* FTSEurofirst 300 rises 0.8 pct
* U.S. consumer confidence readings beat forecasts
* For up-to-the-minute market news, click on []
By Brian Gorman
LONDON, May 26 (Reuters) - European shares gained on
Tuesday, reversing earlier losses, after U.S. consumer sentiment
readings came in stronger than expected.
At 1442 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.8 percent at 864.36 points, having been
as low as 842.26 earlier.
U.S. consumer confidence soared in May to its highest level
in eight months as severe strains in the labor market showed
some signs of easing, though the mood of Americans remained
depressed by historical standards.
The Conference Board said its index of consumer attitudes
jumped to 54.9 in May from a revised 40.8 in April, the biggest
one-month jump since April 2003. Economists had been looking for
a much smaller rise to 42.0. []
Oil companies gained, after the price of crude <CLc1> pared
losses, and was trading around $61.52 a barrel.
Total <TOTF.PA>, ENI <ENI.MI>, BP <BP.L>, Royal Dutch Shell
and <RDSa.L> were up between 0.7 and 2.3 percent.
The pan-European index is up more than 33 percent from the
lifetime low it hit on March 9, on growing optimism of economic
recovery.
Shares had been lower earlier on Tuesday on increased
political risk. North Korea, defiant in the face of
international condemnation of its latest nuclear test, fired two
more short-range missiles off its east coast on Tuesday and
accused the United States of plotting against its government.
[]
Analysts said that political risk was a factor in markets
but that investors were in already in wait-and-see mode,
watching for other events.
"I would expect the North Korea political event to weigh on
the market for one or two days, not more -- markets are waiting
for new macro data, new announcements, and volumes have
diminished a lot in the past three weeks," said Thierry Lacraz,
strategist at Swiss bank Pictet.
"Wall Street does seem to be offering a degree of support as
we approach the close," said Jimmy Yates, head of equities at
CMC Markets.
"The US isn't looking that panicked by the North Korean
missile launches that followed the underground atomic tests over
the weekend, instead finding strength off numbers such as the
better-than-expected consumer confidence reading."
Shares in Danone <DANO.PA> fell 5.2 percent after the French
food group unveiled plans to raise about 3 billion euros ($4.2
billion) by selling shares to existing shareholders to cut debt
and fund bolt-on acquisitions.
The European index is on track for a third successive month
of gains, the first time in two years that it has had such a
long winning streak.
Across Europe, Britain's FTSE <>, Germany's DAX <>
and France's CAC <> were up between 0.6 and 0.8 percent.
(Editing by Karen Foster)
