* FTSEurofirst 300 up 0.6 percent, adds to Wednesday's rally
* Energy shares gain on stronger crude oil prices
* For up-to-the-minute market news, click on []
By Brian Gorman
LONDON, May 27 (Reuters) - European shares rose in early
trade on Thursday, tracking gains in Japan and after China
denied it was looking to cut its holdings of euro zone sovereign
debt.
At 0841 GMT, the FTSEurofirst 300 <> index of top
European shares was up 0.6 percent at 978.12 points, after
rising 2.4 percent in the previous session.
The index is still down more than 12 percent from a
mid-April peak, on worries about Europe's debt crisis.
"It is mostly a reaction to oversold conditions. Equities
are cheap in most places, other than in the worst affected
regions," said Bernard McAlinden, investment strategist at NCB
Stockbrokers, in Dublin.
A Financial Times report that China was reviewing its
holdings of European bonds was groundless, the Chinese central
bank said on Thursday. []
The report had been cited by traders as a reason for U.S.
shares giving up early gains to close lower on Wednesday.
Energy companies were among the biggest gainers, as crude
prices <CLc1> topped $72 after U.S. data showed a big bounce in
oil demand, and as the dollar weakened.
Total <TOTF.PA>, ENI <ENI.MI>, BG <BG.L> and Royal Dutch
Shell <RDSa.AS> rose 1.4-2.3 percent.
BP <BP.L> gained 1.9 percent, as investors looked for news
on latest efforts to contain an oil spill in the Gulf of Mexico.
Oil services companies were also higher, boosted by an
upbeat note from UBS which upgraded several stocks including PGS
<PGS.OL> and Technip <TECF.PA>, up 3 percent and 3.3 percent
respectively.
Miners also gained, building on strong gains in the previous
session, on reports Australia may not implement a planned tax
rise. Higher metals prices also helped.
Anglo American <AAL.L>, BHP Billiton <BLT.L>, Rio Tinto
<RIO.L> and Vedanta <VED.L> rose 1.8-2.8 percent.
Across Europe, Britain's FTSE 100 <>, Germany's DAX
<> and France's CAC40 <> were up 0.9-1.3 percent.
INSURERS GAIN
Shares in insurer Aviva <AV.L> and Legal & General <LGEN.L>
gained 3 percent and 1.7 percent respectively after Nomura hiked
its target prices for both and said it saw "remarkable value"
for investors in the two British stocks.
Prudential <PRU.L> rose 3 percent after The Times reported
shareholders holding up to 15 percent of the British insurer's
shares planned to write to the chairman saying they opposed the
planned $35.5 billion takeover of AIG's <AIG.N> Asian arm.
AXA <AXAF.PA> was up 2.9 percent.
Banks, however, were mostly lower. Spanish banks Banco
Santander <SAN.MC> and BBVA <BBVA.MC> fell 3.2 percent and 2.6
percent respectively. Traders pointed to turmoil in the Spanish
savings bank sector after CajaSur was nationalised at the
weekend.
Hedge fund firm Man Group <EMG.L> rose 4.8 percent after
saying client assets had stabilised after a year of outflows.
[]
Later, investors will look at U.S. GDP data, expected to
show an annualised growth rate of 3.4 percent in the first
quarter, up from the previous reading of 3.2 percent.
Japan's benchmark Nikkei rose 1.2 percent on Thursday.
(Editing by Dan Lalor)
