* FTSEurofirst 300 index up 1.3 percent
* Commodities stocks gain as metal, crude prices rise
* Banks recover from Friday's losses
* For up-to-the minute market news, click on []
By Joanne Frearson
LONDON, Aug 9 (Reuters) - European shares rose on Monday,
above key resistance levels, rebounding from the previous
session's sharp losses, with commodity stocks leading the risers
supported by stronger metal and oil prices.
Growing speculation the U.S. Federal Reserve will have to
buy bonds sooner rather than later, to bolster the sagging
economy also lent support, ahead of the Fed's meeting on
Tuesday.
By 0850 GMT, the pan-European FTSEurofirst 300 <>
index of top shares was 1.3 percent higher at 1,070.47 points
after falling 1.1 percent on Friday.
The Euro STOXX 50 <>, the euro zone's blue-chip
index, rose 1.6 percent to 2,822.85 points, above its 200-day
moving average of around 2,797 points and the 61.8 percent
Fibonacci retracement of the index's fall from an April high to
a May low at 2,805.95 points -- a positive signal.
"The market has bounced back after the U.S. non-farm
payrolls and after a weekend of no bad news the market is
looking strong," said Simon Denhman, chief executive officer of
London Capital Group.
"Europe has broken above recent resistance levels, but the
FTSE 100 <> still has to get above 5,420, the Dow Jones
industrial average <> has to get above 10,700 and the S&P
500 <.SPX> has to get above 1,128, for it to break out further."
The FTSE 100 was up 1.6 percent at 5,414.97 points, while
the Dow Jones ended on Friday at 10,653.56 points and the S&P
500 at 1,121.64 points.
Mining shares were in demand, copper rose 1 percent
supported by a softer dollar and hopes for improving demand if
the Federal Reserve further eases monetary policy.
Lending support to prices were comments from a leading
government economist in China that the economy is on course for
a strong second half, which would bring full-year growth to
about 10-11 percent, more bullish than other forecasts.
[]
Antofagasta <ANTO.L>, BHP Billiton <BLT.L>, Rio Tinto
<RIO.L> and Xstrata <XTA.L> were up 1.9 to 2.3 percent.
Oil stocks were higher as crude <CLc1> gained 0.9 percent.
BP <BP.L> rose 2.3 percent after it said on Sunday its pressure
testing shows it has "an effective cement plug" on its Macondo
oil well in the Gulf of Mexico. []
INTERNATIONAL POWER GAINS
International Power <IPR.L> jumped 4.4 percent. French
utility GDF Suez <GSZ.PA> and British peer International Power
could announce an agreement on a planned asset tie-up in coming
days, British newspapers reported on Sunday. []
Banking shares also recovered from Friday's losses, with the
STOXX Europe Banks <.SX7P> index up 1.5 percent. Societe
Generale <SOGN.PA>, BNP Paribas <BNPP.PA> and Barclays <BARC.L>
rose 2.2 to 2.8 percent.
However, other analysts were sceptical of the rally.
"Don't hold your breath, I think the market will give back
the gains during the course of the day," said David Buik, a
senior partner at BGC Partners.
"Uncertainty of growth around the world is becoming more
apparent every day and we have had a tremendous run following
results. I do not think the rally is sustainable."
Across Europe, Germany's DAX <> was up 1.2 percent and
France's CAC 40 <> was 1.6 percent higher.
(Reporting by Joanne Frearson; Editing by Sharon Lindores)
