Europe stocks extend rally; focus on ECB comments

                                
 * FTSEurofirst 300 up 0.6 pct, adds to Wednesday's recovery
                                
 * Chinese data, Spanish auction help boost sentiment
                                
 * BoE, ECB keep rates on hold; eyes on ECB presser
                                
 * BP extends slump on fears about dividend, more regulation
                                
 * For up-to-the-minute market news, click on [STXNEWS/EU]
                                
 
                                
 By Blaise Robinson
                                
 PARIS, June 10 (Reuters) - European shares rose on Thursday,
helped by strong Chinese trade data while concerns over Europe's
debt eased after positive comments from China's national pension
fund on the euro and strong demand at a Spanish debt auction.
                                
 Investors were bracing for the European Central Bank's news
conference, expected to start at 1230 GMT, after it kept
interest rates on hold. The Bank of England also kept rates on
hold and left its 200 billion pounds of quantitative easing
purchases unchanged on Thursday, as expected.
                                
 At 1153 GMT, the FTSEurofirst 300 <.FTEU3> index of top
European shares was up 0.6 percent at 1,004.35 points, after
reversing an early decline.
                                
 Data showed China's exports surged in May while imports also
grew robustly, reassuring investors about the economy's momentum
despite government steps to cool the red-hot property market.
[ID:nTOE65901X]
                                
 Also lifting investor confidence in Europe, the Chinese
national pension fund chief said the euro would be able to
weather the sovereign debt crisis, triggering a rebound in the
euro from the day's lows, while Spain sold 3.9 billion euros of
new three-year government bonds on Thursday, which analysts said
met with strong demand.
                                
 The Thomson Reuters Peripheral Eurozone Countries Index
<.TRXFLDPIPU> rose 1.1 percent.
                                
 Banking stocks -- Europe's worst performers so far this year
-- gained ground, with BBVA <BBVA.MC> up 1.8 percent, Banco
Popolare <BAPO.MI> up 1.9 percent and BNP Paribas <BNPP.PA> up
1.8 percent.
                                
 Investors braced for the ECB's press conference, during
which it will face a grilling on the region's debt crisis after
a hectic month in which it has abandoned resistance to buying
government debt and flung its exit strategy into reverse.
[ID:nLDE6590CW]
                                
 "ECB's 'fighting-inflation' focus over the past decade has
been a failure, debt-to-GDP ratios in the euro zone have
exploded," said Yves Bonzon, chief investment officer of Pictet.
                                
 "Allowing inflation to creep up would help growth."
                                
 Shares in oil major BP <BP.L> dropped 4.8 percent --
extending their slump to more than 40 percent since its oil
spill in the Gulf of Mexico started in mid-April -- as the
company faces mounting pressure from U.S. officials to suspend
their dividend and fears grow of tighter regulation of the
industry in the wake of the disaster.
                                
 Around Europe, UK's FTSE 100 index <.FTSE> was up 0.1
percent, Germany's DAX index <.GDAXI> up 0.3 percent, and
France's CAC 40 <.FCHI> up 0.6 percent.
 (Editing by Simon Jessop)