* FTSEurofirst 300 up 0.5 percent
* Euro STOXX 50 moves above 200-day moving average
* Alcoa's results fuel earnings optimism
* Banking stocks bounce back, boosted by bullish notes
* For up-to-the-minute market news, click on []
By Blaise Robinson
PARIS, Jan 11 (Reuters) - European stocks rose in early
trade on Tuesday, snapping a three-day losing streak, as
forecast-beating results from U.S. aluminium major Alcoa <AA.N>
sparked hopes for the upcoming European earnings season.
German conglomerate Siemens <SIEGn.DE> rose 2.4 percent
after the firm said its first-quarter profit and sales were set
to surpass the year-earlier figures on robust factory demand.
News that Japan was considering buying about 20 percent of
euro zone bonds, to be jointly issued later in January to raise
funds to support debt-swamped Ireland, also helped reassure
investors. []
At 0942 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.5 percent at 1,139.19 points,
rebounding after a 1 percent drop on Monday.
The euro zone's blue chip Euro STOXX 50 <> index
was up 0.3 percent, at 2,769.52 points, moving above its 200-day
moving average, hit on Monday.
The index's next resistance level is at 2,805.95 points, the
61.8 percent Fibonacci retracement of the index's drop from last
April's high to a May low.
"The focus is switching to companies' results this week,
with earnings due from big U.S. names such as JPMorgan <JPM.N>,
but the euro zone debt fears will remain in the backdrop and
could continue to weigh on banking stocks," said Geraud
Missonnier, trader at Saxo Banque in Paris.
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Banking stocks were among the top gainers on Tuesday, as
upbeat research notes helped the sector rebound after recent
sharp losses.
HSBC <HSBA.L>, which was upgraded by Citigroup to "buy" from
"hold", gained 2.3 percent, while Credit Agricole <CAGR.PA> rose
2 percent after Societe Generale upgraded the stock to "buy"
from "hold".
"It is profitability rather than the capital structure that
drives share prices. An investment strategy based on avoiding
the weakest capitalised banks performed poorly in 2010," Societe
Generale analysts wrote in a note.
"Indeed, rather than strong capitalisation, it was banks that
reported an improvement in RoRWA (return on risk weighted
assets) that saw expansion in their price/book multiple. We
expect this theme to continue."
Investors remained cautious, however, ahead of this week's
key government bond auctions in the euro zone.
Investors awaited to see if Lisbon will be able to raise
funds in the debt market at a sustainable cost on Wednesday or
ultimately have to turn to the EU and IMF for financial aid.
The premium investors demand to hold bonds issued by Spain,
Italy and Belgium, rather than low risk German Bunds pushed
wider on Tuesday, and Portuguese 10-year yields remained above 7
percent, a level seen as an unsustainable cost of financing.
While the FTSEurofirst 300 has gained 1.6 percent since the
beginning of the year, Spain's IBEX 35 <> has lost 4.1
percent and Portugal's PSI20 <> has fallen 3 percent so
far in 2011.
(Reporting by Blaise Robinson; Editing by Mike Nesbit)
